Several cryptocurrency scams have been exposed since the beginning of 2021 and the legal actions have been taken by authorities. A lot of cryptocurrency scams normally appear as online chain referral schemes, high-return investments, or Ponzi-schemes.
Scammers normally tell people to send them funds or carry out a payment using a specified digital currency, and when these individuals do as they were being told, their funds are gone and this money can’t be traced, retrieved or sent back to them hence end up making losses.
In case users suspect or spot any crypto scam, they should report it to the responsible security authorities like the police and regulators such as the Federal Trade Commission (FTC), and other agencies in their respective countries. When people report scam cases, authorities will have to swing into action and start the investigations. If the culprits are discovered, they will be arrested and charged accordingly.
On January 11, 2021, the founder of one of the fake cryptocurrency investment schemes was sentenced to 10 years in prison and ordered to pay a fine of about $1885,000 to the Internal Revenue Service (IRS).
Steven Chen, 63 years old, a founder of Gemcoin is now behind bars for tax evasion and defrauding over 70,000 of crypto-investors from 2013 to 2015. Chen was running a Ponzi scheme under the names of USFIA and it managed to peddle more than $146 million in Gemcoin.
Another owner of RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria was ordered to be put in prison and serve 121 months for breaching the financial laws. A Bulgarian man by the name of Rossen G. Lossifov, 53, was charged for participating in scams and money laundering activities.
Rossen used his platform to victimize more than 900 Americans. He used to publish false advertisements for high-cost goods and victims could pay using cryptocurrency, and then the crypto was transferred to other foreign-based money launderers working with him. The fraudster defrauded about $7.1 mln in digital currency from the victims.
By the time 2021 reaches its end, more and more scammers and fraudsters who have been threatening the peace of cryptocurrency users will have been investigated, arrested and brought to book.