Cryptocurrency scheme involving $22 million discovered in UK, victims spread around the world

Cryptocurrencies worth $22.2 million (about Rs. 165 crores) were seized by UK police after a global fraud scheme was uncovered. They found pen drives containing large amounts of Ethereum, the second largest cryptocurrency in the world after Bitcoin. The Greater Manchester Police (GMP) said the scheme deceived people from the UK, the US, Europe, China, Australia and Hong Kong. Victims deposited money, some even life savings, believing it to be a genuine savings and exchange service using Binance Smart Chain. Two people were arrested for alleged fraud and money laundering but were released under investigation.

The discovery brought to light the anonymous and international nature of these virtual currencies. Criminals often take advantage of anonymity for money laundering and for terrorism, tax fraud and drug trafficking. While most cryptocurrency transactions are legitimate, many are also fraudulent.

The GMP Economic Crimes Unit said that a total of $9.5 million (about Rs. 70.6 crores) in stolen Ethereum was discovered on the seized flash drives. Police found another $12.7 million (about Rs. 94.4 crores) a few days later after finding an online safe (an encryption safe) and its access code.

The GMP said it has begun locating the rightful owners, some of whom are still unknown and scattered around the world, and pooling them with their money.

One of the fraud victims, who preferred to remain anonymous, told police she had been using cryptocurrency for years. “The hack really surprised us at first,” he added, thanking the police for tracking down the money.

The GMP said that the victim will receive 90% of her investment back and if all funds are not claimed, she will receive the full amount.

Detective Chief Inspector Joe Harrop of the Economic Crime Unit said people are increasingly moving online and see cryptocurrency as the future of money and commerce. But this shift is also leading to a new type of crime, and opportunistic criminals are looking to exploit these trends, as well as any gaps in the technology. Harrop said law enforcement also needs to adapt to this emerging type of crime.

On August 19th (12:10 pm IST), the price of Ether in India was at Rs. 2.33 lakhs.


Interested in cryptocurrency? We discuss all things cryptography with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you want. you get your podcasts.

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