An Austrian court has recently handed down prison sentences to five individuals connected to the EXW-Token scam, marking one of the largest cryptocurrency fraud trials in the history of the country. The trial, which lasted for a year and included 60 days of hearings, found several people guilty of orchestrating a fraudulent scheme involving the EXW crypto token and the EXW Wallet.
The accused individuals allegedly lured victims with promises of high investment returns in the non-existent token, while also promoting other ventures under the EXW brand such as a real estate business and a car rental service. The EXW wallet, which was launched in 2019, was revealed to be an elaborate MLM crypto Ponzi scheme that defrauded around 40,000 investors of approximately $21.6 million by promising daily returns ranging from 0.1% to 0.32%.
Although the scam collapsed in 2020, it was reportedly revived and rebranded as Exchange World. The ill-gotten funds were used by the defendants to finance a lavish lifestyle reminiscent of a Hollywood movie, complete with luxury cars, private jets, extravagant parties in Dubai clubs, and opulent home decorations like a villa with a shark tank and shoeboxes filled with cash.
Operating out of Dubai, the accused allegedly transferred some of the stolen money to Austria. The Klagenfurt Regional Court sentenced two defendants to five years in prison, while two others received 30-month sentences with 21 months suspended for a three-year probationary period. Another defendant received an 18-month suspended sentence.
The defendants claimed that they initially intended to run legitimate investment projects but lost control of the situation. However, the court dismissed this defense, asserting that the fraud was premeditated with no genuine profits in mind.
Crypto investment frauds have been on the rise, with scammers taking advantage of the allure of high returns and the complexities of blockchain technology to deceive investors. Regulatory bodies worldwide are ramping up efforts to combat such fraudulent activities in order to safeguard investors and uphold trust in the cryptocurrency market.
Recent cases include a fraud trial in France targeting 20 individuals involved in a $30 million crypto scam, the sentencing of an Indian national to five years in prison for stealing over $20 million from investors through a crypto exchange spoofing scheme, and a U.S. District Court ordering a promoter of the Forcount Ponzi scheme to pay $3.6 million in restitution and serve a 20-year prison term.
Despite the harsh penalties imposed on fraudsters, the FBI reported over $5.6 billion in losses due to cryptocurrency scams and frauds in 2023, a 45% increase from the previous year. In Ireland, more than 45% of investment fraud cases were related to cryptocurrencies, according to the national police force.
These cases underscore the importance of due diligence and caution when investing in cryptocurrencies, as well as the need for continued vigilance and enforcement actions to combat fraudulent activities in the digital asset space.