The National Police have uncovered a network of illegal cryptocurrency exchanges that have defrauded customers across Ukraine
The National Police, in conjunction with the cyber police, are conducting a large-scale investigation as part of criminal proceedings opened in connection with a fraud case. Law enforcement officers are carrying out more than 40 urgent searches at the suspects’ homes, as well as at the premises of currency exchange bureaux suspected of involvement in crypto-asset fraud.
According to the investigation, the network of exchange offices was operating without the necessary licences. Under the guise of providing currency exchange and crypto-asset purchase services, its members misappropriated clients’ funds.
The scheme was disguised as a legitimate financial service. To this end, they used a website, an application system, Telegram communications, verification codes and a network of exchange outlets across various regions of the country. Everything was organised in such a way that customers perceived the service as official.
The mechanism operated according to a clear pattern. After submitting an application on the website, a manager would contact the customer to provide the application number, a personal confirmation code, the address of the exchange outlet and other details of the transaction.
Clients would then visit the exchange points and hand over the cash. However, once the funds had been received, the suspects failed to provide the promised crypto-assets or return the money. Instead, they offered clients vague explanations and dragged out the process indefinitely.
Whilst the criminal activity was being documented, members of the network used a similar scheme to obtain 50,000 hryvnias as part of a test purchase.
During the searches, law enforcement officers seized documents, vehicles and cash to be used to compensate the victims for their losses. In total, cash in various currencies amounting to over 20 million hryvnias was seized.
One of the members of the criminal group was detained in accordance with Article 208 of the Criminal Procedure Code of Ukraine. The authorities plan to notify him of the charges against him and serve him with a motion for the imposition of a preventive measure.
The National Police, under the procedural supervision of the Office of the Prosecutor General, are currently identifying all those involved in the scheme, including the organisers and those who directly received funds from the victims. The investigation is ongoing.
