Ukraine shuts down crypto fraud network
Ruslan Kravchenko / Telegram
Ukrainian authorities uncovered a network of fraudulent cryptocurrency
exchanges operating across the country and seized more than UAH20 million
($450,000) in cash during searches, Prosecutor General Ruslan Kravchenko announced
on July 2.
Investigators say the enterprise posed as a legitimate
currency and crypto-asset exchange service. The operators used a custom website,
Telegram channels, an application system, individual confirmation codes, and a
network of physical exchange points to create the appearance of a bona-fide
financial service.
After customers submitted requests to buy cryptocurrency, a
so-called “manager” would contact them with an operation number, confirmation
code, the address of an exchange point, and other details. Victims who handed
over money never received crypto assets or refunds; instead they were given
formal explanations and the process was delayed, officials said.
During evidence-gathering, participants in the scheme similarly took UAH50,000 ($1,117) as part of an undercover purchase, a development Kravchenko said showed the method was well worked out.
“If a person hands over money and receives nothing in
return, that is not a business model but grounds for a criminal case,”
Kravchenko said.
The National Police said investigators conducted more than
40 searches as part of the criminal probe. Officials searched residences of
suspects and the premises of the exchange points. They said the network
operated without proper licenses and that all contact with “clients” was cut
off after funds were received.
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