Police have arrested a 24-year-old Dutch law student from Hengelo, Netherlands, accused of operating crypto scams that defrauded approximately 300 people, causing them a loss of €4.5 million ($4.6 million).
The arrest came after a foundation representing victims provided new evidence to authorities.
Bull market fuels crypto scams and fraud
The student, on the run since the collapse of his trading scheme last year, sought police protection after investors harassed him. However, police moved him to a safe location.
However, investigators uncovered allegations that he continued to attract new investors even when his scheme was about to fail.
The victims claim the law student operated a Ponzi scheme, using funds from new investors to pay off previous participants. He allegedly required a minimum investment of €5,000 and charged 50% of the profits as a fee.
Legal experts have expressed concerns about the scale of the alleged fraud, which remains under active investigation.
Fraud and attacks in the cryptocurrency industry reached alarming levels in 2024. Losses totaled $2.3 billion, a 40% increase compared to the previous year.
Crypto Hits Losses from 2020 to Q2 2024. Source: The Motley Fool
Crypto Scams: Threats on the Rise
More worryingly, scammers are taking full advantage of the growing number of new investors attracted by the bull market.
Several significant crypto scams have emerged in recent months. For example, the release of the second season of Squid Game on Netflix led to the creation of fraudulent tokens referencing the show.
Blockchain security firm PeckShield quickly identified these tokens as scams, warning the public.
During the holiday season, hackers targeted users of Ledger, a popular cryptocurrency hardware wallet. Hundreds of users received phishing emails designed to steal recovery phrases. Meanwhile, several influential social media accounts on X (formerly Twitter) were hacked to promote fake tokens.
Additionally, AI-powered scams have seen a significant increase. Hong Kong authorities uncovered a deepfake crypto romance scam, leading to the arrest of 27 suspects accused of defrauding victims of $46 million.
The increasing frequency and sophistication of these crypto scams highlights the critical need for stronger proactive safeguards in the industry.
The article Student arrested for alleged multi-million dollar crypto fraud was first seen on BeInCrypto Brazil.