Authorities crack down on Austria-based online crypto scam

Authorities in Austria, along with counterparts in three other nations, have taken decisive action against an online scam masquerading as a new cryptocurrency venture.

In a press release on May 8, the European Justice for Criminal Justice Corporation disclosed the details of a coordinated effort aided by Europol to apprehend scammers who falsely claimed to have established a company launching a new crypto asset.

The fraudsters, operating from Austria, purported to have developed proprietary software and algorithms between December 2017 and February 2018. They enticed investors with offers of 10 million tokens in exchange for rights to purchase the purported new cryptocurrency.

Unfortunately, investors in the project suffered losses totaling €6 million, a figure expected to rise as not all victims have been identified.

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This recent incident echoes similar scams reported in the past. In November 2023, crypto.news highlighted a case where the FBI arrested three individuals for exploiting security vulnerabilities in banks, defrauding them of over $10 million, which was then converted into cryptocurrency.

Additionally, in March 2024, a British citizen named Wen Jian was found guilty by a London court of defrauding over 130,000 investors of $6 billion between 2017 and 2022.

The prevalence of such scams has led to significant financial losses for investors. In February 2024 alone, investors reported losses exceeding $412 million to scammers. In April 2024, cryptocurrency scams and exploits resulted in losses amounting to $25.7 million, representing the lowest figure recorded in three years.

Moreover, PeckShield, an on-chain security firm, reported a decrease in losses from crypto attacks and scams during April, marking the first significant decline observed in 2024.

Read more: Gary Gensler: Crypto operators not providing adequate disclosures

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