Just when you may have thought you’d heard every devious act bad actors have tried to pull off in their quests to profit from the crypto space, another one comes up.
The latest comes from the Ukraine where bad actors were brazen enough to setup and operate fake crypto exchanges.
Let’s get right to this latest scheme to hit the crypto space.
Ukrainian police officially announced over the weekend that four people who were suspected of running six fake cryptocurrency exchanges had been arrested. The police stated that the arrests of the four entailed men aged between 20 and 26. They were arrested June 7.
During the investigation, police found these people worked on a scheme in which $3,000 worth of counterfeit money had been “transferred to the perpetrator of the crime.” The counterfeit money was apparently the vehicle of choice because it was twice as cheap as real money.
Police said the four had "special knowledge and skills in the field of programming" and "have created their own CMS-system for managing the content of exchange sites."
In addition, to setting up the fake exchanges, the culprits used them to steal funds from users.
The bandits tried to protect their reputations and not stick out as scammers by putting up online reviews that pushed fake positive ratings, according to police.
All the domains used by the suspects have apparently expired. Still some sites have reportedly lived long enough to be indexed by the Wayback Machine portal.
A Ukrainian National Police spokesperson said the list of sites is not complete as it is thought that the group ran far more sites. Officials are encouraging users to file complaints if they believe they were duped by fake exchanges.
Officers raided the suspects' homes, and seized computers, flash drives, smartphones, and other equipment. To determine how much damage the culprits may have caused, Police officers are currently investigating the seized equipment.
Hotbed for crypto crime
Ukrainian officials acknowledge that the country has become a hotbed for crypto-related scams and fraud.
In fact, last year, Ukrainian Police reportedly arrested a group of people who made off with more than $50 million worth of Bitcoin by running a huge phishing operation. The group pulled out the stops to make it happen.
This included renting Google ads that displayed crypto ads. If they were clicked on, the person would be redirected to clones of popular wallet and exchange portals. These culprits allegedly logged user credentials and then drained their accounts.