The Balearic Islands hosted the launch of a far-reaching cryptocurrency investment scam that victims say defrauded more than 3,000 people across the globe. The operation involved a company registered in Palma that channeled funds to dozens of recipients and, at its peak, allegedly moved more than a hundred million euros. Authorities arrested a single suspect in Palma, while investigations continue into others connected to the scheme. The money allegedly traveled through several non-EU countries, with Azerbaijan, Georgia, Ukraine, Russia, and Israel cited as destinations. The case has drawn in a wide network of defendants and venues as investigators trace the route of the funds from initial investments to final destinations abroad. In the end, the ill-gotten gains reportedly ended up far from the European Union. An extensive network of suspects is under scrutiny as the investigation unfolds.
Investigators with the Civil Guard began their inquiries in the Basque Country after a complaint from an Álava resident who claimed to be the victim of a cryptocurrency scam. They determined that the fraudulent activity may have been organized by a Palma-registered company.
Further inquiries revealed that the Palma-based entity conducted a large number of transfers to countries outside the European Union. These transfers represented the final leg in a scheme designed to defraud investors with non-existent digital currencies.
Members of the organization recruited potential victims through aggressive online marketing on well-known platforms. They complemented this with cold calls, newspaper advertisements, and text messages. The typical pitch promised high returns on investments with minimal risk, creating a false sense of legitimacy.
Once a prospective client was identified, the organization would formalize a contract for investments in non-existent cryptocurrencies. Investment amounts ranged from about 250 to 1,000 euros. Victims were granted access to a website showing simulated gains via fake charts and graphs crafted to project solvency and legality. This visual deception helped to build trust among those affected.
From that point forward, investors received constant phone calls from a supposed broker, who claimed huge profits had already been earned and encouraged continued investments that did not exist. Some victims were even persuaded to invest their life savings.
The moment of realization came when investors sought to withdraw their funds. Fake brokers requested additional payments, citing taxes or the need to complete annual accounting, sparking a second wave of deception.
As a result of the operation, Civil Guard investigators were able to disrupt the scheme and locate multiple locations involved in the scam. More than 3,000 victims worldwide had invested in the fraudulent digital assets, with around a hundred cases registered on national soil. Many victims remain unaware that they were defrauded.
The operation, named “Mandoa,” involved cybercrime specialists from the Balearic Islands, the Basque Civil Guard, and the Madrid-based Judicial Police Technical Unit. All actions were overseen by the 3rd Investigation Court of Vitoria-Gasteiz (Álava).
advice
The Civil Guard has issued practical guidance to curb such large-scale cryptocurrency scams. In February 2021, national regulatory bodies and the Bank of Spain warned about the high volatility and risk associated with investing in cryptocurrencies.
Citizens are urged to be wary of promises of substantial profits and guaranteed returns with no risk, especially when received through unsolicited emails or mobile messages. Exercise caution with any investment offers that arrive without prior research or independent verification.
Conducting due diligence before investing is essential. It is advised to review the reputation and history of any website offering crypto products, and to be suspicious of recently created pages that imitate established brands through deliberate typographical errors. Additionally, avoid platforms tied to opaque tax havens as a starting point. If an investment is pursued despite these warnings, it is recommended that individuals consult official government and European regulatory agencies for guidance, as they periodically publish lists of fraudulent websites.