A fraudulent network of cryptocurrency exchanges was uncovered in Ukraine: over 20 million hryvnia were seized
2 July 22:41
In Ukraine, law enforcement officials have uncovered a large-scale network of cryptocurrency exchange outlets, whose participants, according to investigators, were embezzling customers’ money. The scheme operated in at least seven regions of the country and was disguised as a legitimate service with a website, managers, order forms, confirmation codes, and physical exchange locations. This was reported by Ukraine’s Prosecutor General Ruslan Kravchenko, according to "Komersant Ukrainian"
During the special operation, law enforcement officers conducted more than 20 searches and seized cash in various currencies totaling over 20 million hryvnia.
According to the investigation, customers handed over cash to employees at the exchange points but subsequently received neither the promised cryptocurrency nor a refund.
How the cryptocurrency exchange scheme worked
On the surface, the service looked like a regular currency and crypto asset exchange network.
To create the impression of legitimate business operations, they used:
- a website for submitting requests;
- communication with customers via Telegram;
- account managers;
- unique order numbers;
- confirmation codes;
- addresses of physical exchange locations;
- standard transaction details.
After submitting an application, a manager would contact the person. The manager would provide the application number, confirmation code, exchange location address, and other details regarding the upcoming exchange.
“Next, customers would go to the designated exchange locations and deposit funds, which the operators would embezzle, while the customers received only vague explanations and had the process dragged out indefinitely,” Kravchenko noted.
However, the crypto assets were never credited to his wallet.
What Happened After the Money Was Transferred
According to the investigation, after receiving the funds, the exchange employees began to delay the transaction.
Clients might be told about:
- a technical delay;
- payment verification;
- a network issue;
- the need for additional approval;
- awaiting confirmation;
- temporary unavailability of the required asset.
Ultimately, people received neither cryptocurrency nor a cash refund. Law enforcement officials believe that the funds were embezzled by members of the network.
During a sting operation, 50,000 hryvnias went missing
According to Ruslan Kravchenko, law enforcement officials conducted a controlled operation while documenting the network’s activities.
Following the same scheme, representatives of the service received 50,000 hryvnias, but did not carry out the promised exchange.
According to investigators, this incident confirmed that the scheme was systematic and operated according to a predetermined algorithm.
More than 20 searches in seven regions
Law enforcement officers conducted more than 20 searches in seven regions of Ukraine.
Investigative actions took place at:
- currency exchange offices;
- premises associated with the service’s operations;
- the residences of suspected participants in the scheme;
- other locations where funds and evidence might have been stored.
During the searches, cash in hryvnias and foreign currencies totaling more than 20 million hryvnias was seized.
