Luxury Cars & Wild Parties: $22 Million Crypto Scam Dupes 40,000 Investors

A gang of convicted Austrian fraudsters financed their luxurious life with money acquired from a giant crypto scam. Among other luxuries they purchased were a shark tank, a villa, a luxury car, private jet travels, and nights at club parties, Heute, an Austrian news outlet, reported on October 23. Around 40,000 people were reportedly victimized by the scheme, with around $21.6 million (20 million euros) accumulated from the fraud.

The operation of the fraudulent investment scheme was based on investments in the EXW Wallet, as well as in EXW crypto tokens and real estate projects. EXW promises an attractive 0.1% to 0.32% daily return, which catches the attention of most investors.

Following its activation in 2019, the EXW Wallet began to fail in 2020. After adding suspects, authorities accused eight people in September 2023 with money laundering, pyramid scheme operations, and commercial fraud.

By October 23, the Klagenfurt Regional Court had convicted five of those accused in the fraud. Two received five-year prison terms without parole, while two others received sentences of 30 months. An additional defendant received 18 months, while five were acquitted. Of three prior convictions with the defendants, three were counted towards the sentence, and some of the convicted are reportedly planning appeals.

As Heute called it, “Austria’s biggest fraud trial” took longer than a year: 60 days in court, 300 long hours of negotiations, and 3,000 case files. According to Prosecutor Caroline Czedik-Eysenberg, the scam wasn’t simple since it involved operations in several countries without extradition treaties, such as the UAE.

To further obfuscate the financial trails, the fraudsters used encrypted Telegram communications and even enlisted the assistance of companies who are expert in the field. Some carried funds in plastic bags to Austria, the report disclosed.

Czedik-Eysenberg described the operation as never intending to pursue profitable projects, with initial promises only meant to attract victims. Defense attorneys argue that some defendants merely lost control as the scheme got too big for them to handle.

Separate charges are also sought in a cannabis-related fraud, wherein it is estimated that $17.2 million (16 million euros) has been stolen from over 17,000 individuals.

Featured image from Pexels, chart from TradingView