A recent operation in Lviv, Ukraine, has shut down six illegal call centers. The operation carried out by the Security service of Ukraine has stopped these operations from continuing their cryptocurrency investment scams. From their base of operations, the crypto scammers were reaching out to countless potential victims to try to defraud them with promises of non-existent investment opportunities.
Cybersecurity Operation Leads to Successful Seizure of Scam Equipment
On September 27th, 2021, the Security Service of Ukraine released a statement detailing a recent crackdown on illegal call centers dedicated to operating international cryptocurrency scams. SSU cybersecurity experts were eventually able to track down the perpetrators and shut down their operation.
This type of scam has been becoming increasingly common, both in Ukraine and in other countries around the world. The scammers rely on a variety of advanced security measures to prevent authorities from discovering their true whereabouts. Despite their efforts, agencies like the SSU are regularly able to track down and stop these scams. Unfortunately, the sheer quantity of independent operations makes stopping the practice for good a near-impossible feat.
This particular crackdown was the culmination of an investigation into six separate illegal call centers. The call centers operated from offices and apartments in Lviv. From these locations, the scammers used VoIP lines to reach out to countless victims and take their money under the pretense of offering them cryptocurrency investments.
The investigation into the full extent of this operation is ongoing. During their crackdown on the six locations in Lviv, the SSU seized over 100 pieces of the computer equipment used in the scam operation, along with many mobile devices and routers. Along with this equipment, the SSU found forged records and bank details belonging to victims, along with some documents that suggest further illegal activities.
Frequency of Crypto Investment Scams Still on the Rise
Cryptocurrency investment scams have become some of the most lucrative fraudulent operations around the world. The prices of Bitcoin and other cryptocurrencies reached massive all-time highs earlier in 2021, spurring both legitimate and illegitimate investment opportunities.
Scammers will offer massive returns to their victims, often including buzzwords like “automated trading” in their pitch to sweeten the deal. However, the victims soon find that they haven’t received anything for their money. The scammers are simply taking their funds and hoping that the privacy measures they’ve taken are enough to keep the authorities from ever tracking them down.
Eastern Europe, and Ukraine particularly, are hotspots for this type of activity. The scams target English-speaking victims who are predominately from the United States and the United Kingdom. International law greatly complicates bringing these scammers to justice, with many seeming to get away with their crimes for good.
Recent Crypto Trends in Ukraine and Abroad
Earlier in September, Ukraine officially legalized the use of cryptocurrencies within the country and laid down regulations that took Bitcoin out of the legal gray area it had existed in for years. Prior to this development, cryptocurrencies were largely seen as a scam by the Ukrainian government. This isn’t difficult to understand, given the prevalence of scam operations like “Bitcoin Prime” which are orchestrated by scammers from inside the Ukraine. This so-called trading robot was recently exposed by ScamCryptoRobots in a very well-researched article. The acceptance of Bitcoin for legitimate use by organizations could see these crackdowns on illegitimate operations become more common.
The effort to crack down on these types of cryptocurrency scams is starting to take on a more central role in countries around the world. A report from the US Federal Trade Commission made it clear that cryptocurrency investment scams have never been more prevalent, with over $80 million being lost in the period between October 202 and May 2021. According to the FTC, this is a tenfold increase over the previous 12 months.
These new types of investment scams are increasingly targeting a demographic that hasn’t been accessed by more traditional scams. For those in their 20s and 30s, cryptocurrency fraud is the single largest category that people lose money to. While various types of investment scams have existed for a long time, they have typically targeted the elderly.
Long Road Ahead for Agencies Fighting Crypto Scammers
The nature of cryptocurrencies has always made tackling fraud a difficult task for law enforcement agencies everywhere. This is further complicated by international borders and the anonymity measures that scammers use to hide their true identities. While this recent crackdown is a promising sign, there is still a long way to go.