Ukrainian law enforcement, working with international agencies, have uncovered a scheme in which suspects convinced people to invest in a fake cryptocurrency mining project, officials said Wednesday.
Three Ukrainian nationals allegedly helped orchestrate the scheme, which defrauded victims of about $13 million in the United States, Latvia, Israel, Malta, Spain, and other countries, according to Ukraine’s National Police.
Since early 2021, the suspects had advertised cryptocurrency “cloud mining” services, mainly targeting European internet users. Victims were persuaded to pay to rent computing power from third-party companies, which were supposedly generating virtual assets to be paid out as dividends. The group even created a website to simulate activity, deceive investors, and collect their personal data.
Investigators said the three Ukrainians acted as money launderers, or “money mules.” Illegally obtained funds were initially transferred to wallets held by the suspects in Ukraine before being moved to accounts controlled by the scheme’s organizers or converted into cash.
Police determined that all three suspects are relatives. Two moved to Germany after Russia’s full-scale invasion of Ukraine, while the third remained in Dnipro.
The Cyber Police Department and the Main Investigative Department of Ukraine’s National Police, under the guidance of the Office of the Prosecutor General, worked with Latvian and German authorities, with support from Europol, to uncover the scheme.
During the investigation, Latvian authorities identified cryptocurrency wallets used by the suspects. A detailed analysis of the transactions traced the flow of funds from victims to the suspects. Authorities said about 154.6 Bitcoin, valued at more than $13 million, was funneled into the fraudulent wallet.
Ukrainian police carried out searches at the suspects’ registered addresses in Dnipro, while German authorities conducted simultaneous searches at the homes of two suspects in Germany.
The three suspects have been charged under Latvian law and face up to 12 years in prison if convicted.
