I just came across an impressive case that shows how serious crypto scams have become. In Austria, the court recently sentenced five individuals involved in the EXW-Token scam — one of the largest crypto fraud cases in the country’s history.

The story is actually quite crazy. It all started in 2019 with the EXW Wallet, which turned out to be a sophisticated MLM Ponzi scheme. The scammers promised victims daily returns between 0.1% and 0.32%, even though the token didn’t actually exist. In the end, over 40,000 investors were defrauded of about 20 million euros. The scheme collapsed in 2020 but was allegedly restarted under the name Exchange World.

What I find particularly fascinating is how the perpetrators spent the money. Luxury cars, private jets, extravagant parties in Dubai — the report describes it as something straight out of a Hollywood movie. They even decorated their houses with absurd things like a shark tank and shoeboxes full of cash. The operation was based in Dubai, but parts of the money were transferred to Austria.

Regarding the verdict: Benjamin Herzog, one of the co-founders, was sentenced along with Pirmin Troger in September 2023 — both received five years in prison. The Regional Court of Klagenfurt has now sentenced two more defendants to five years, while two others received 30 months, with 21 months suspended. A fifth defendant was sentenced to 18 months probation. Manuel Batista, the third co-founder, is still on the run. The court dismissed the defendants’ claim that they intended to carry out legitimate projects — it was planned from the very beginning.

But this is not an isolated case. Such scams are exploding worldwide right now. In October, a case was initiated in France against 20 individuals who defrauded investors of $30 million. An Indian man was sentenced to five years in prison for stealing over $20 million by impersonating a well-known exchange. In the US, a Ponzi scheme promoter had to pay over $3.6 million in damages and is now serving 20 years in prison.

The numbers are truly alarming. The FBI reports that crypto scams alone led to losses of over $5.6 billion in 2023 — a 45% increase from the previous year. In Ireland, more than half of all investment fraud cases involved cryptocurrencies. Scammers simply exploit the allure of high returns and the complexity of blockchain technology to deceive beginners. Authorities worldwide are tightening their measures, but apparently not fast enough. This only shows how important it is to stay critical when investing in crypto and to understand what you’re buying.