Ukrainian police and the Ukrainian Security Service (SBU) have exposed a crypto fraud scheme targeting residents in the country and other European countries.
According to Ukrainian authorities, fraudsters ran several call centers that offered residents to participate in crypto trading. The fraudsters introduced themselves as officials from state banks to obtain personal information, such as credit card data. They said the fraudsters promised their victims a lot of instant profits.
The criminal group used sophisticated tools to make their phone numbers appear as if they were banks’ official numbers. Additionally, they launched fake websites and exchanges that claimed to accommodate various assets, including crypto, legal tenders, securities, oil and gold.
In a press release, Ukrainian police added that the criminal group had also accessed a database containing information about foreign citizens who had been victims of similar schemes. To this group of victims, the criminals said they were from the "Community of Cryptocurrency Brokers" and offered to track and recover the victims’ crypto assets for a “commission.” However, after receiving the commission, these brokers halted communication and never returned the promised assets.
What's one thing you're always confused about #crypto?— CoinMarketCap (@CoinMarketCap) September 1, 2022
The authorities seized computers, mobile phones, and records as proof of the alleged illegal activities during the investigation. The fraudsters may serve up to 12 years in prison if found guilty under the country’s criminal code.
Despite Ukraine’s current security crisis due to the Russian invasion, law enforcement still works to fight cybercrime in the country. Reports suggested that fake call centers are increasingly common—not only in Ukraine but also in the whole EU.
The police arrested nine people for a phishing crime in June this year. The group reportedly stole 100 million hryvnias (around $3.4 million) by promising access to financial aid from the EU.
Another report from Group-IB this August revealed a group of investment scammers running 10,000 fake websites localized for people in the United Kingdom, Netherlands, Belgium, Germany, and several other EU countries. Users who provided their information to those websites would receive follow-up calls from the scammers.
The scammers would show a fake dashboard page to the victim, displaying the "profits" the victim had made in their investments even though no trading actually took place. Users who wanted to get their money back were required to meet a “payout threshold” by depositing more funds into their accounts.
Crypto market in Ukraine
New data released by Merchant Machine showed that Ukraine is among the top three countries worldwide in terms of crypto uses. The crypto uses analyzed in the study were the number of crypto investors, businesses accepting cryptocurrencies as a payment, and the availability of Bitcoin ATMs in the country.
Analysts said that Russia’s invasion of Ukraine plays a significant role in increasing crypto usage in the nation. Before the war, Ukraine was already one of the top crypto users globally, but the Ukrainian government’s move to expand crypto’s role in the country’s economy further encouraged its residents to embrace digital currencies.
After the war broke out, Ukrainian digital transformation minister Mykhailo Fedorov immediately instructed the development of a government wallet that accommodates crypto transactions. In August, the Ukrainian government reportedly raised $119.5 million in cryptocurrency to fund its military functions.