Massive Crypto Fraud Trial Opens in France: 20 Defendants, 1,300 Victims

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Hassan Shittu

Journalist

Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in…

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Last updated:

October 22, 2024 16:03 EDT

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A large-scale crypto fraud trial opened on Monday in Nancy, France. Over 20 defendants are accused of scamming 1,300 victims through fake crypto and diamond investment schemes.

The case, dubbed “red card,” has drawn massive attention due to the involvement of a dozen football clubs among the victims. A total of €28 million ($30 million) was allegedly stolen.

Major Crypto and Diamond Fraud Trial Opens in France

According to local French media, the trial, which is expected to last four weeks, was held in a conference center to accommodate the 850 victims represented.

The defendants, aged 28 to 73, are accused of running fraudulent websites between 2016 and 2018, offering bogus investment opportunities in diamonds and cryptocurrencies. Lulled by promises of high returns, victims suffered significant financial losses, with some taking out loans to invest.

According to Colman, a law firm representing around 100 plaintiffs, one victim reportedly lost €400,000 in a “diamond savings plan.”

“We believe this trial marks a strong signal in the fight against international financial fraud,” the firm stated.

France Opens Trial for $30M Diamond and Crypto Fraud

A major trial has opened in Nancy, France, involving 22 defendants accused of defrauding 1,300 individuals and top football clubs in a $30 million scam involving fake cryptocurrency and diamond investments.

The case, dubbed… pic.twitter.com/gCiAR4c5fQ

— VERITAS PROTOCOL (@veritas_web3) October 22, 2024

Investigators revealed that the accused opened 199 bank accounts in 19 countries to transfer funds. Around €2.8 million has been recovered and may be used to compensate victims.

In addition to defrauding individuals, the scheme also targeted football clubs. Fraudsters based in Marseille and Israel posed as agents for professional players, convincing clubs like Sochaux, Angers, and Toulouse to redirect salary payments to fraudulent accounts, costing them approximately €60,000.

Global Fraud Uncovered: 199 Bank Accounts, 19 Countries, and Hundreds of Victims

The complex operation involved 199 bank accounts across 19 countries to move the stolen funds. Authorities have identified around 850 victims, some of whom invested large portions of their savings or took out loans to participate in what they believed were legitimate investment opportunities.

The case, dubbed “red card” due to the involvement of football clubs, has drawn widespread attention.

The use of crypto allowed for quick and difficult-to-trace transfers across borders, complicating efforts to recover the money.

Twelve individuals are accused of using their identities to open bank accounts and transfer stolen funds, while others are charged with creating fake websites or procuring counterfeit diamonds.

Three defendants remain at large and are being tried in absentia.

Authorities have recovered €2.8 million, which may be used to compensate the victims. The Colman law firm, representing around 100 plaintiffs, stated that this trial marks a significant stand against international financial fraud.

As cryptocurrencies gain popularity, their misuse for illegal activities like money laundering and terrorism financing has also increased. Governments are responding by implementing measures to combat these issues, including asset seizures.

The UK’s Economic Crime and Corporate Transparency Act 2023 empowers law enforcement to seize, freeze, and recover crypto assets linked to illegal activities without arrest. Authorities can even destroy assets when necessary.

The Department of Justice (DOJ) established the National Cryptocurrency Enforcement Team (NCET), focusing on complex crypto-related criminal investigations. This initiative complements the FBI’s earlier efforts in tackling cryptocurrency crimes.

Other countries are also taking steps to regulate and prevent using cryptocurrencies in criminal activities.

EigenLayer, the second-biggest protocol on Ethereum, was hacked on October 18 to front an airdrop scam. One victim’s wallet was drained of over $800,000 in crypto.