Cryptocurrency Fraud , Fraud Management & Cybercrime

Police Seize $22 Million From Online Safe and USB Sticks

$5.4 Million Returned to Cryptocurrency Scam Victims Following Raid by UK Police
Police Seize $22 Million From Online Safe and USB Sticks
Cryptocurrency deals: "If it seems too good to be true, it probably is." (Source: Shutterstock)

Following recovery of $22.25 million in cryptocurrency on USB sticks and in an "online safe," 23 victims of a cryptocurrency scam have received $5.4 million that was stolen from them, according to the U.K. Greater Manchester Police

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The scam was detected in July by specialized police officers of the GMP's Economic Crime Unit, which recovered USB sticks containing $22.25 million during a raid, the statement says. It says the alleged perpetrators were in Manchester for a "limited" period of time but does not specify the building(s) in which the raid took place.

The GMP's call to victims to claim their money has been answered by 150 people so far, it says.

In an update added to its statement, the police department says that "the sum [seized in the operation] totaled 90% of the cryptocurrency stolen, and work has now begun on re-uniting it with the rightful owners, some of whom are still unknown and located across the world."

More people are likely to be reimbursed, as the GMP says it is investigating 127 other claims from individuals in the U.K., the U.S, Europe, China, Australia and Hong Kong. Victims can contact OpGabbro@gmp.police.uk to claim their money, it adds. They must include details such as the name of the savings and trading service in which they invested, the law enforcement agency to which they reported the crime, and their wallet addresses and documentation to prove ownership of funds.

Background

In July, the Economic Crime Unit of GMP was tipped off about scammers running a fake online savings and trading service scheme in Manchester. The officers tracked two individuals - a 23-year-old man and a 25-year-old woman - and arrested them on charges of fraud and money laundering.

During the raid, the officers seized USB sticks that contained $9.5 million of stolen Ethereum. A few days later, the officers found another $12.7 million worth of cryptocurrency in a cryptograph safety deposit box, aka an "online safe."

Explaining the modus operandi, the police say that the victims were lured to deposit money - including their life savings - into "what they thought was an online savings and trading service using Binance Smart Chain, which stores and records transactions made in cryptocurrency, confirming their movement and value."

Binance Smart Chain - now rebranded as Binance Coin or BNB - is an independent blockchain that works in a stand-alone mode even if the Binance Chain goes down. It is Ethereum-compatible and supports staking and community-based governance along with native interoperability, which makes it a popular choice for many.

According to the GMP, the scammers operated this unnamed, fake service through a website and shut it down only after a significant amount of money had been deposited in it by unsuspecting victims. Before ghosting, the scammers transferred the funds into their own accounts. "Unfortunately the scammers did not disappear without a trace," the police statement says, as GMP officers linked the trail to the two arrested individuals.

The suspects have since been released under investigation pending further inquiries, the statement says.

Blockchain Professional Also a Victim

The sophistication of the scammers was such that an experienced blockchain professional from the U.K., who wishes to remain unnamed, fell victim to the scam, the GMP says. "Despite working in the industry and using cryptocurrency for years, he lost hundreds of thousands worth of cryptocurrency," it says.

"Crypto-assets often aren't understood across the world, and therefore are not taken seriously because the technology is so new, and it can be complicated. I'm an experienced blockchain professional, I had done all the research with friends who work in programming development to make sure it was safe," the victim says in the statement.

The victim will get 90% of his funds back, the GMP says, adding that he will get 100% back "if the funds remain unclaimed" by others.

The GMP did not immediately respond to Information Security Media Group's request for clarity on how long it would allow people to claim the money.

A Word of Caution

Joe Harrop, detective chief inspector of GMP's Economic and Cyber Crime unit, in a statement, urges caution by those using cryptocurrency saving and trading services.

He says: "Cryptocurrency saving and trading services are becoming increasingly popular, with projects offering incentives to people to invest significant amounts of money, offering tokens that can then be sold for a profit. Anyone involved in these cryptocurrency and trading services is urged to take extreme caution and do a lot of research as there are still huge risks. Online currency and trading is incredibly technical and needs in-depth knowledge in order to make sure your money is safe. If it seems too good to be true, it probably is."


About the Author

Mihir Bagwe

Mihir Bagwe

Senior Correspondent, Global News Desk

Bagwe previously worked at CISO magazine, reporting the latest cybersecurity news and trends and interviewing cybersecurity subject matter experts.




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