Crypto Scam: Spanish Authorities Bust International Criminal Organization That Swindled Over $110M

The Spanish police have reportedly torn down an international criminal group that aggressively marketed a massive crypto scam and stole hundreds of millions of dollars from unsuspecting victims by luring them to invest in cryptocurrencies that never existed.

On Monday, Guardia Civil, the oldest law enforcement agency in Spain, arrested a resident of the Balearic Islands, an archipelago outside of eastern Spain, for allegedly scamming crypto investors in various countries.

The special investigation, dubbed "Operation Mandoa," kicked off after the police received a complaint from a person in the province of Alava, claiming they had been conned in a crypto fraud, the Guardia Civil said in a press release.

The special operation, which covered the Balearic Islands and the Basque Country, found the fraudulent firm operating in Palma de Mallorca and reportedly moving the loot from the scam to countries outside the European Union,

Spanish authorities also discovered that multiple people in Azerbaijan, Georgia, Ukraine, Russia, and Israel received funds from the alleged crypto scam operation.

Perpetrators lured victims to invest in the scam through aggressive marketing strategies on various websites with heavy traffic, the authorities said.

They also conducted phone calls, sent messages and advertised in newspapers, and, like any other scams and fraudulent schemes, promised investors high returns without any risk.

Unsuspecting victims initially invested between EUR 250 and EUR 1,000, according to the Spanish authorities.

The scammers, following the investment, would send a link to a website, where investors would see the profits of their investment with false data and graphics.

Authorities believe the website kept the investors hooked and to further encourage more investments, scammers would allegedly pose as brokers and inform the victims of the massive yield of their stake in the company.

However, the problems would start when the investors attempted to withdraw their funds.

When this happens, scammers would use various excuses and would even ask victims for additional funds to pay for taxes, or as payment for closing annual balances.

The alleged international crypto scam organization stole approximately EUR100 million or more than $100 million from victims.

The U.S. FBI, in its annual crime report, shared that in 2022, over $10 billion was lost to online fraud as cryptocurrency scams skyrocketed, noting it was the highest annual loss over the past five years.

The bureau also disclosed that last year recorded a massive spike of 127% from 2021, recording $3.31 billion in investment fraud complaints, 2$2.57 billion of which are crypto investment fraud.

"In 2022, investment scams were the costliest scheme reported to the IC3. Investment fraud complaints increased from $1.45 billion in 2021 to $3.31 billion in 2022, which is 127%. Within those complaints, cryptocurrency investment fraud rose from $907 million in 2021 to $2.57 billion in 2022, an increase of 183%," the report read.