EU law enforcement agencies work together to crack the case, arresting five core members.

Europol announced on Monday that the Spanish Civil Guard, with assistance from law enforcement agencies in the U.S., France, Estonia, and other countries, successfully arrested five members of a criminal network suspected of engaging in cryptocurrency investment fraud. This case involved over 5,000 victim investors, with a fraud amount reaching €460 million, approximately $542 million.

According to reports from Europol, law enforcement arrested three individuals in the Canary Islands and two in Madrid on Wednesday, while simultaneously conducting search operations. Investigations indicate that the leaders of this criminal network are suspected of utilizing a global accomplice network to carry out fraudulent activities through various means, including cash withdrawals, bank transfers, and cryptocurrency transfers.

This case is considered one of the largest cryptocurrency investment fraud cases in Spain. In January of this year, Spanish authorities froze over $26.4 million in digital assets related to money laundering activities, indicating that local efforts to combat cryptocurrency crime are ongoing.

Hong Kong set up shell companies to construct a complex money laundering network.

Investigators suspect that this criminal organization established a network of companies and banks in Hong Kong, allegedly using payment gateways and user accounts in the names of different individuals to receive, store, and transfer criminal funds across various exchanges. Through this complex structure, the fraud group can effectively hide the flow of funds, increasing the difficulty for law enforcement to trace.

This case employed the 'pig-butchering' scam technique, where fraudsters first establish a trust relationship with victims, gradually 'fattening' their targets through friendly interactions, and then convincing victims to invest increasingly larger sums of money. This type of scam often yields large amounts of money from a single victim due to its gradual and psychological manipulation characteristics.

Europol pointed out that criminal networks utilize a globalized operational model that allows funds to flow between different countries and platforms, attempting to evade regulatory mechanisms in various nations. The transnational nature of these criminal activities underscores the importance of international cooperation in combatting cryptocurrency fraud.

The United States acts in sync, with international cooperation to combat cryptocurrency fraud.

At the same time that Spain uncovered this major fraud case, the U.S. Department of Justice announced on June 18 that it had seized over $225 million in assets related to cryptocurrency investment fraud, which also involved pig-butchering scam techniques. U.S. authorities stated that the characteristic of this type of fraud is to cultivate the victim's trust over time, gradually inducing them to invest larger amounts.

Further Reading
U.S. Uncovers 'Pig-Butchering'! Seizes $225 Million in Cryptocurrency, Commends Tether for Assisting in Fraud Investigation.
Binance Roundtable: Assisting in Freezing $200 Million in Funds! The Key to Fighting Fraud is for People to Understand Bitcoin.

Additionally, U.S. authorities reported another case in June, where five men admitted to participating in a cryptocurrency fraud case involving $37 million, with related assets transferred to Cambodia. These cases show that cryptocurrency fraud has become a primary means of profit for transnational criminal groups and often involves complex international money transfer networks.

The effectiveness of international cooperation is significant, and cryptocurrency crime regulation is tightening.

These law enforcement actions highlight that authorities in various countries are actively cooperating to combat cryptocurrency fraud and protect the public from such sophisticated criminal groups. From Spain's $542 million fraud case to multiple related cases in the U.S., it shows that law enforcement has established effective international coordination mechanisms.

The anonymity and cross-border characteristics of cryptocurrencies provide convenience for legitimate users, but also present opportunities for criminals. Regulatory bodies in various countries are striving to strike a balance between promoting innovative development and maintaining financial security through enhanced international cooperation, improved legal frameworks, and increased technical capabilities.

As such cases are frequently exposed, investors' awareness of the risks associated with cryptocurrency investments is also increasing. Law enforcement agencies urge the public to remain vigilant, especially when faced with investment opportunities promising high returns, and to carefully evaluate and invest through legitimate channels to avoid becoming targets of fraud groups.

'Fraud Exceeds $500 Million! Spain's Pig-Butchering Scam Exposed: Hong Kong Sets Up Shell Companies, 5,000 Victims' was first published in 'Crypto City'.