More than 300 people were defrauded and millions of euros in money disappeared. It is one of the largest crypto fraud cases of all time in the Netherlands. Who is the man from Hengelo and how exactly did he work? Crypto Insiders examined how the 23-year-old Dutchman works.
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Who is the 23-year-old man from Hengelo?
The man suspected of defrauding hundreds of Dutch people out of money is a 23-year-old law student from Hengelo. Recently he was supposed to go to a training camp in Turkey with the first selection of the HSC'21 football club, but it was canceled. In addition, people around him describe him as a “crypto genius”.
Nothing further is known about the man himself. However, a spokesman writes on behalf of the crypto trader that he is completely mentally disturbed. The spokesman also states that the Hengelo resident has sought professional help and is undergoing treatment. However, his whereabouts are currently a mystery, although a police spokesman appears to be aware of his whereabouts.
The 23-year-old suspect was involved in cryptocurrencies and was trying to make quick profits. Investors who wanted to participate had to deposit at least 5,000 euros. In addition, the man sent an email every month with a profit summary. This allowed investors to choose whether they wanted to cash out their winnings or reinvest their profits.
More than 300 crypto investors have suffered
Lawyer Arjon Tieman, who works at Damsté Advokaten, where more than a hundred victims have already reported, estimates that around 300 crypto investors fell for the man's practices: “Based on mailing lists, we assume there are possibly three hundred crypto investors. “were cheated. But there are also investors who are not on the list, so the number could rise even further.”
Since some investors actually received their profits, this seemed legitimate at first. The striking profits then spread like wildfire among friends and family. This made even more people willing to invest money in the suspect's crypto service. One victim said that new customers registered quickly, thanks in part to the success stories.
The plan ultimately led to hundreds of Dutch people becoming victims and causing millions of dollars in damage. In many cases it involves significantly more than the minimum investment of 5,000 euros. Tieman has seen amounts of 35,000 to 50,000 euros happen. If you multiply that by the number of victims, you quickly get damages in the millions.
In a response to Crypto Insiders, Tieman said that an information evening was organized for those affected on January 16th. Here they were informed about the next steps. For example, they are recommended to set up a foundation together and then think about the legal steps.
According to the lawyer, it is also important that more information about the situation is obtained. In addition, other parties involved can be investigated, such as the suspect's bank and crypto platforms. According to the lawyer, these parties had a duty of care and should have raised the alarm about such amounts.
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How the fraudulent crypto trader operated
What we know so far is that it points to two possible investment tactics he has pursued over the past two years.
The first suspicion is a pyramid scheme in which participants create new participants. It is that the investor's profit depends on the new participants. The crypto trader has thus paid out the first investors with the deposit money from new customers. However, this cannot yet be said with certainty. Attorney Tieman says the information they have now is still very current, but that it looks suspiciously like a pyramid scheme.
The second suspicion is that the crypto trader was short selling. This is a trading strategy that can be used to profit from falling markets. For example, you can opt for a short position on Bitcoin (BTC) if you think the price will decline. If the value falls, you can profit; if it rises, you have to buy the value back at a higher price and therefore suffer a loss.
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How can you protect yourself from fraudulent Bitcoin cowboys?
As an investor in cryptocurrencies or stocks, there are several steps you can take to protect yourself from fraudulent cryptocurrency traders. First, you should ask yourself whether promises made are realistic.
For example, if high returns of 50% are promised, this should already be a warning signal. Such returns are unrealistic in most cases, especially when promised in the short term. The same applies to so-called Giveaway scam The victim must first send crypto to an address with the promise that they will receive double the amount back.
In addition, in such cases it often happens that you have to act quickly, for example because the money has to be transferred quickly in order to have a greater chance of a higher return. Even if you get evasive answers about how the system works, this is a sign that it may be a scam.
Would you like to discuss this case or do you have any questions about crypto fraud? Crypto Insiders has an active, free community on Telegram where members are happy to protect each other from malicious practices.
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