Major cryptocurrency fraud trial in France — 20 defendants, 1,300 victims

A massive crypto fraud trial kicked off on Monday in Nancy, France, and it’s making headlines for all the wrong reasons. With over 20 defendants accused of running shady investment schemes involving cryptocurrencies and, surprisingly, diamonds, this case is already being dubbed “Red Card.” Why “Red Card,” you ask? Well, because a dozen football clubs are among the victims! Apparently, even footballers aren’t immune to the glittering lure of high returns.

The accusations center around 199 bank accounts opened across 19 countries, allegedly used to funnel a jaw-dropping €28 million away from the 1,300 unsuspecting investors. Some victims were so convinced by these slick promises of “easy money” that they took out loans to join in.

With ages ranging from 28 to 73, the accused allegedly operated these fraudulent sites between 2016 and 2018, enticing victims with fake crypto and diamond investment opportunities. The trial is set to last four weeks, and because of the sheer number of victims—850 representatives present—they had to hold it in a conference center.

I guess the moral of the story here is: if someone promises you diamonds and crypto, maybe it’s too good to be true!

France Opens Trial for $30M Diamond and Crypto Fraud

A major trial has opened in Nancy, France, involving 22 defendants accused of defrauding 1,300 individuals and top football clubs in a $30 million scam involving fake cryptocurrency and diamond investments.

The case, dubbed… pic.twitter.com/gCiAR4c5fQ

— VERITAS PROTOCOL (@veritas_web3) October 22, 2024

According to Colman, a law firm representing around 100 plaintiffs, one victim allegedly lost €400,000 in a “diamond savings plan” related to a massive fraud case.

Investigators revealed that the accused opened 199 bank accounts across 19 countries to transfer the illicit funds. However, approximately €2.8 million has been recovered, which could be used to compensate the victims.

In addition to defrauding individuals, the scheme also targeted football clubs. Fraudsters based in Marseille and Israel posed as agents of professional football players. They convinced clubs like Sochaux, Angers, and Toulouse to redirect salary payments to fraudulent accounts, causing losses of about €60,000.

3 defendants still remain at large

Three defendants remain at large, while around 850 victims have been identified, some of whom invested large portions of their savings or even took out loans for what they believed were legitimate investment opportunities. The case, nicknamed “Red Card” due to the involvement of football clubs, has garnered significant attention.

The use of cryptocurrencies in the scheme allowed for fast and hard-to-trace cross-border transactions, complicating efforts to recover the stolen funds. Twelve individuals are accused of using their identities to open bank accounts and transfer stolen money, while others are charged with creating fraudulent websites or acquiring fake diamonds.

Three defendants are still fugitives and are being tried in absentia. Colman, representing around 100 plaintiffs, emphasized that this trial marks a significant stand against international financial fraud.

Governments continue to combat cryptocurrency-related frauds

As cryptocurrencies gain popularity, their use in illegal activities like money laundering and terrorism financing has increased. To address these issues, governments are implementing measures, including asset seizures.

For example, the 2023 Economic Crime and Corporate Transparency Act in the UK empowers authorities to seize, freeze, and recover crypto assets linked to illegal activities without the need for an arrest. Authorities can even destroy the assets when necessary.

Similarly, the U.S. Department of Justice (DOJ) has established the National Cryptocurrency Enforcement Team (NCET), focusing on complex criminal investigations related to cryptocurrencies. This initiative complements earlier efforts by the FBI to combat crypto-related crimes.

Other countries are also taking steps to regulate and prevent the use of cryptocurrencies in criminal activities.

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Roman Blecha

I have 6 years of writing experience on several leading websites dealing with cryptocurrencies and other investments. I have been in the Web3 sector for a similar amount of time and have collaborated on several projects from NFT to P2E. My previous experiences: Business2Community.com, TradingPlatforms.com, CryptoSvet.cz