cryptocurrency scam

American Fugitive Wanted for $722 Million Crypto Scam Arrested in Indonesia for Child Sex Offenses

An American fraud fugitive wanted by the US Federal Bureau of Investigation (FBI) for a $722 million cryptocurrency scam has been nabbed in Jakarta, Indonesia, for child sex crimes. Russ Medlin has been on the wanted list of the FBI based on his involvement in a fraudulent Bitcoin scheme dubbed the Bitclub Network.

End of the road

It seems the proverbial forty days of a thief have dawned on Medlin as the US Justice Department found him answerable for a fake bitcoin mining that siphoned more than $700 million from investors in December 2019. Three of his accomplices were arrested, but he managed to flee from the long arm of the law.

US prosecutors allege that Medlin was the ringleader of the fraudulent Bitclub Network that emerged to be a high-tech Ponzi scheme. The scam was operational from April 2014 until December 2019, and unsuspecting investors were lured with earnings purported to be generated from Bitcoin mining.

Nevertheless, it is not clear whether the US authorities will ask for his extradition to face charges for the cryptocurrency scam.

Roma Hutajulu, Jakarta police special investigation director, noted:

We are still waiting for a request from the US Embassy.”

The cryptocurrency fraud headache

According to a report by Fortune Business Insights, the cryptocurrency market is expected to hit $1.75 billion by 2027 though it is becoming evident by the day that fraud in this sector is a considerable stumbling block.

However, the law is catching up with crypto fraudsters as witnessed in South Korea after a district court froze 15 cryptocurrency wallets belonging to Cho Ju-bin, the ringleader of the “Nth Rooms” scandal where underage girls were sexually exploited.

During the time of arrest, Medlin had $20,000, and if convicted under the Indonesian Child Protection Laws, he could be imprisoned for 15 years. Time will tell whether he will face the cryptocurrency fraudulent charges he is facing in the US.

Ripple Impersonated by Scammers in a Fraudulent “XRP Incentive Plan” Token Giveaway

Cryptocurrency scammers have been capitalizing on Ripple’s success by rolling out a new XRP giveaway initiative that proved to be fraudulent.

Lately, Ripple’s XRP token has surged to new heights, hitting a two-year high after having sat on the sidelines while other altcoins surged. However, in a week span, XRP has managed to outperform both Bitcoin (BTC) and Ethereum (ETH), recording gains that were more than double its price.

A fake XRP giveaway that was flagged by Ripple blockchain firm recently promoted XRP giveaways as part of a “Community Incentive Programs.” To warn against this, CEO of Ripple Brad Garlinghouse clarified and said:

“Hackers are using IDN (internationalized domain names) homograph attacks (E.g capital I instead of lowercase I in ripple. com, etc) and these websites can stay up for months (despite reporting them)”

How to spot fake cryptocurrency claims

Scammers impersonating Ripple claimed to be giving away free XRP tokens on behalf of the fintech firm’s incentive programs. Per the official Ripple account, the statement warned of these fraudulent cryptocurrency streams. It read:

“Beware of the latest giveaway scam: there is a fake email and fraudulent website circulating offering ‘Community Incentive Programs’ or ‘XRP Incentive Plans.’ Neither Ripple nor any executive of our company, has offered – or ever will offer – free giveaways of digital assets.”

The blockchain firm stipulated that it will never endorse or authorize any XRP giveaways. In order to better help detect scams, Garlinghouse also cited a document from Krebson Security, which specializes in cybersecurity and cybercrime.

The latter indicated that at times, emails that appeared to be legitimate could be redirected to an internationalized domain name, which is simply a transformation of the original domain name. These fake domain names could be associated with phishing and spoofing attacks.

Ripple sues YouTube for XRP scam videos

With the rise in popularity and the mainstream adoption of cryptocurrencies, scammers have also used the opportunity to main profits of their own. Previously, Garlinghouse and Ripple’s legal team had filed charges against YouTube, alleging that it played a part in XRP cryptocurrency scams circulating on its content hosting platform.

Additionally, Ripple argued that YouTube benefited from cryptocurrency scams that were streamed on its network, as revenue could be generated from paid ads that auto-played in between video content.

Serbian Citizen Extradited to US to Face Crypto-Related Fraud Charges

On Friday, February 5, the US Department of Justice revealed that Serbia has handed over its citizen, Antonije Stojilkovic, 32 years old, to the United States to face charges over conspiracy to commit fraud and launder money through a crypto mining investment scam.

Acting US Attorney Prerak Shah, said:

“We are proud to bring Mr. Stojilkovic to Dallas to face justice in an American courtroom. The U.S. Department of Justice will not relent in our fight against cybercrime.”

The DOJ alleged that Stojilkovic and his six colleagues duped investors across the world – many of them live in northern Texas – out of more than $70 million.

According to the court document, Stojilkovic and his partners (five Serbian co-conspirators and one US-based co-conspirator) set up fake trading platforms from their home bases in China, Serbia, and elsewhere, and used such platforms to advertise cryptocurrency mining and binary options services to innocent investors across the globe.

The culprits operated the platforms under the names of Trinity Mining, BTC Mining Factor, Bancde Options, Options Rider, Dragon Mining, and Start Options.

The binary trading services claimed to offer an average payout of 80% and promised 20% refunds on every lost trade while the crypto mining platforms promised investors to buy Bitcoin at half market price. The $70 million scam cut across several continents, targeting US citizens and foreigners.

By displaying a respectable and convincing online presence, fake figures on their scam investment portals and a series of fraudulent withdrawal history logs and fake wire receipts, Stojilkovic and his partners made investors think that the crypto mining and binary options trading was legitimate business activities.

If found guilty, Stojilkovioc and his co-conspirators would face a maximum of 20 years in federal prison.

Apart from Serbia, there is no public information from any other nation making a similar extradition request for the culprits.

Common Crypto Scams to Avoid

The significant rise of Bitcoin’s value has attracted many people to invest in the cryptocurrency in order to get better returns. However, anyone chasing that fortune can easily fall victim to opportunistic con artists who perpetrate cryptocurrency scams.

These scams pitch themselves as investment opportunities, promising high returns, but with a catch; investors have to pay some funds to an agent, or into an account, or asked to send funds somewhere.

Such scams tend to market themselves heavily and hide their true intentions through tried and tested marketing gimmicks. Lots of them have an element of referrals, promoting it to others, or inviting others for some rewards, and their marketing agents are known to be excellent at sales and marketing.

Investors interested in Bitcoin are advised to be aware and stay alert of potential scams associated with fake Bitcoin exchanges, Ponzi schemes, fake cryptocurrencies, ransomware scams, and pump-and-dump scams.

Mangofarm Scandal: Solana's Blockchain Ensnared in Alleged Ponzi Scheme Ties

The Solana blockchain project, Mangofarm, gets embroiled in a controversy reminiscent of the notorious Banana Miner Ponzi scheme. This development throws a spotlight on the perennial challenges of trust and security in the digital currency domain.

Mangofarm, a project within the Solana blockchain, is now under scrutiny due to its suspected links to the infamous Banana Miner Ponzi scheme. Investigations reveal that coded messages embedded in Mangofarm’s programming bear a sinister resemblance to those associated with the Banana Miner fiasco. Initially misinterpreted as distress signals, these messages are now seen as taunts from a scammer who seems to be mocking his victims.

Users on the X platform raised the alarm about Mangofarm, reporting unauthorized withdrawals from wallets interacting with the project. This pattern, closely mirroring classic scam tactics, heightened concerns within the crypto community. The Solana community, in response, has been advised to exercise extreme caution, particularly those involved with Mangofarm or related projects. Current recommendations include transferring assets to more secure wallets and revoking any approvals linked to Mangofarm.

The Banana Miner Ponzi scheme, allegedly masterminded by British national Richard Matthew John O’Neill (aka Jo Cook), defrauded investors of a staggering $6.5 million in bitcoin. The scheme, described in a U.S. forfeiture suit, involved false promises of refunds and a pivot to a laundering and refund scheme. Despite promising transparency and a level playing field for users, O’Neill’s operation led to significant losses for investors, with some losing substantial amounts of bitcoin. The scheme collapsed soon after the late-2017 bitcoin price surge, leaving many investors in financial distress.

as a stark reminder of the volatile and often perilous nature of investments in the cryptocurrency sphere. The case of Mangofarm’s alleged connection to the Banana Miner scheme underscores the importance of due diligence and cautious scrutiny by investors in the digital currency world. It also highlights the sophisticated methods used by scammers to exploit the decentralized and often unregulated nature of cryptocurrency platforms.

The Mangofarm situation has prompted a community-wide call for increased security measures and awareness. Users are being urged to remain vigilant about where and how they invest their digital assets. The cryptocurrency community is once again reminded that while blockchain and digital currencies offer revolutionary potential, they are not immune to the age-old risks of fraud and deception.