Crypto Fraudsters Caught Spending Big, Austrian Trial Reveals
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Loading... - Petra Vogel
- 31 Oct 2024
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A trial in Austria has exposed a massive cryptocurrency fraud scheme, where scammers lived lavishly off €20 million (approximately $21.6 million) stolen from over 40,000 victims. The trial, which lasted more than 60 days and included 300 hours of hearings at the regional court in Klagenfurt, is considered one of the largest in Austrian legal history.
The fraudulent operation involved a cryptocurrency platform that promised investors high returns through real estate projects, trading, and its own EXW token. However, the defendants misappropriated the funds, using them to finance extravagant lifestyles rather than investing as promised. Witness testimonies revealed that the accused indulged in private jet travel, luxury cars, exclusive parties, and even installed a shark tank in a villa in Bali.
The defendants frequented prestigious clubs in Dubai, spent lavishly on entertainment, and transported their illicit gains across borders in plastic bags. Their deceptive practices included relocating the company’s headquarters to Dubai, complicating the investigation due to the lack of an extradition agreement between Austria and the UAE, which allowed some members to evade justice temporarily.
The trial, which began in September 2023, involved multiple defendants from Austria, Italy, Croatia, and other countries, facing charges of serious fraud, money laundering, and operating a pyramid scheme. They employed a well-coordinated strategy to mislead investors, primarily communicating through encrypted messaging platforms and laundering funds through cryptocurrency channels to obscure their activities.
After extensive courtroom proceedings, the jury delivered its verdict: two defendants received five-year prison sentences, while two others were sentenced to 30 months, with part of their sentences suspended. A fifth defendant received an 18-month suspended sentence. Additionally, several convicted individuals are required to pay damages and cover legal costs. However, five defendants were acquitted, and at least one key figure did not appear in court. Some convicted parties have already indicated plans to appeal the rulings.
A contentious aspect of the trial was whether the fraud was premeditated or if it spiraled out of control as the defendants struggled to manage the influx of investors. Prosecutor Caroline Czedik-Eysenberg argued that the fraudulent scheme was intentional from the outset.
This case in Austria is part of a broader trend, as a similar major fraud trial is currently underway in France, where over 20 defendants are accused of scamming 1,300 victims through fake cryptocurrency and diamond investment schemes, resulting in losses of approximately €28 million ($30 million).
