Law enforcement officials have uncovered a fraudulent network of crypto exchanges operating in seven regions of Ukraine and, during searches, seized cash in various currencies totaling more than 20 million hryvnia, according to Ukraine’s Prosecutor General Ruslan Kravchenko.
According to him, under the guise of a currency and crypto-asset exchange service, the scheme’s participants defrauded citizens of their funds. To do so, they used a website, Telegram, an order system, confirmation codes, and a network of exchange locations, creating the impression of a legitimate financial service.
As Kravchenko explained, after a request was submitted, a manager would contact the client to provide the request number, a unique confirmation code, the address of the exchange location, and other details. After handing over the cash, clients received neither crypto assets nor a refund; instead, they were given vague explanations, and the process was dragged out indefinitely.
According to the Prosecutor General, while the crime was being documented, members of the network used a similar scheme to embezzle 50,000 UAH as part of an undercover purchase, which, in his opinion, indicates that a well-established mechanism was in operation.
“If a person transfers money and receives nothing in return, that is not a business model but a subject of criminal proceedings,” Kravchenko noted.
He also reported that notices of suspicion are being prepared for the scheme’s participants regarding the fraudulent misappropriation of another’s property, committed by a group of individuals acting in concert, and that the investigation is ongoing to identify all those involved in the platform’s operation—from the organizers to the individuals who accepted funds from the victims.
For its part, the National Police of Ukraine reported that investigators and cyber police, as part of the criminal investigation into the fraud, are conducting more than 40 urgent searches at the residences of those implicated and at currency exchange offices.
“The currency exchange network was conducting business activities without the appropriate licenses. Furthermore, under the guise of providing currency exchange services and purchasing cryptoassets, its members embezzled citizens’ funds. After transferring the money, the victims did not receive the promised cryptoassets, and contact with the suspects was severed,” reads a statement released on the National Police’s Telegram channel by its press service.
The police also reported that, as part of the investigation, documents, vehicles, and cash are being seized to facilitate the subsequent compensation of losses to the victims. One member of the criminal group has been detained in accordance with Article 208 of the Criminal Procedure Code of Ukraine. He is to be notified of the charges against him and served with a motion for the imposition of a preventive measure.
