AI Cryptocurrency Fraud: Spanish Police Arrest Six Suspects for $20M Scam, Seize 100,000 Euros

Spanish police arrested six suspects in a cryptocurrency investment scam. The scam allegedly used deepfake advertisements with images of public figures generated by artificial intelligence technology to deceive the public. 208 victims worldwide lost 19 million euros due to the scam.

Two years ago, police received reports from victims and launched an investigation code-named “COINBACK-WENDMINE,” which led to the arrest of six suspects, aged from 34 to 57, from several regions of Spain.

The arrests were accompanied by the confiscation of cell phones, computers, hard drives, weapons, documents, and 100,000 euros.

The scammers carefully select victims who match their goals through some kind of algorithm, and they may pretend to be in love with them, using the tricks in pig-buterching scams. They attracted the victims' attention with AI-generated deepfake ads, which often feature well-known public figures recommending investment products.

Believing in the celebrities, victims assumed the investment products were safe and profitable. However, the so-called huge investment returns seen by victims were actually fabricated data by the fake platform.

During the process of the scam, the fraudster falsely claimed that the client's funds had been frozen and asked for fees to retrieve the funds. In addition, the fraudsters posed as European police or British lawyers, claiming that the victims had recovered their lost or frozen funds and demanding taxes and fees to get the money back.

Furthermore, to dispose of ill-gotten gains, the fraudsters created multiple shell companies for money laundering activities. The masterminds even used more than fifty false names.

Spanish police are reminding the public to remain vigilant and verify the legitimacy of investment platforms before depositing.

Artificial intelligence technology makes it easy for criminals to create deepfake videos, so investors should not trust the reliability of an investment product or service simply because of an advertisement by a public figure when making an investment decision. One should carefully check the financial licenses of the platforms in question to avoid financial scams.