Spanish Police Bust $20 Million AI-Powered Crypto Investment Scam Ring

Six arrested for AI-powered investment scams that stole $20 million

Spain's police arrested six individuals behind a large-scale cryptocurrency investment scam that used AI tools to generate deepfake ads featuring popular public figures to lure people. The scam was very successful, defrauding 19 million Euros ($20.9M) from 208 victims worldwide. The police operation, codenamed "COINBLACK - WENDMINE," started two years ago following the submission of a victim's complaint. The action led to the arrests of six individuals aged between 34 and 57 in the regions of Granada and Alicante. Moreover, 100,000 Euros, mobile phones, computers, hard drives, firearms, and documents were seized during the police raids. The police's announcement underlines the complexity of the operation, explaining that the criminals had created multiple shell companies to launder the crime proceeds. At the same time, the group's leader used over 50 distinct aliases. The scam had multiple phases, starting with typical "romance baiting" or the threat actors posing as "financial advisors" and ending with a twist of fake money recovery claims. Victims were chosen via algorithms that selected persons whose profiles matched the cybercriminal's targeting requirements and subsequently targeted by AI-generated deepfake ads. "With the help of Artificial Intelligence, the scammers created fake ads featuring well-known national figures apparently recommending investing in these products," explains the Policia National announcement. "This significantly increased the victims' trust in the security and profitability of the investments." Victims initially saw large investment returns on what were essentially fake platforms that generated false figures. At some point, the scammers, who posed as financial advisors or even simulated romantic relationships with the victims, informed them that their investments had been blocked and their money could only be recovered if they made a large payment. In the final phase, the victims were contacted by the scammers again, who now posed as Europol agents or UK lawyers, claiming that their funds had been recovered and only required them to cover local tax costs to get them back. The police warn the public to be wary of promises of guaranteed returns and always verify the legitimacy and trustworthiness of an investment platform before depositing any funds. Other red flags include pressure to invest, inability to withdraw, unexpected balance "blocks," and claims about additional "fees/taxes" required to withdraw money. Realistic AI-generated deepfake videos are now easy to create, so users should not be influenced by famous people supposedly promoting investment platforms.

Spanish Police End Crypto Scam Ring That Used AI to Swipe $21 Million From Investors - Decrypt

Spanish cops have arrested six people as part of a two-year operation to cripple a crypto investment scam ring that used artificial intelligence to con 208 people out of over €19 million ($21.5 million) in total. The operation started two years ago when a man from the city of Granada went to the police after having lost €624,000 (over $700,000), the Spanish National Police said. Authorities said that the alleged criminals used realistic celebrity videos, powered by AI, to convince would-be investors to hand over cash. In order to keep the con going, the group would tell victims that in order to be able to unlock their initial investment, they would have to plug more money into the scheme -- which promised huge returns through crypto investing. Spanish police did not say which cryptocurrencies the scammers used, but did warn the public generally about investing in digital assets. "The National Police and the Civil Guard remind citizens of the importance of extreme caution in the face of investment offers that promise high profits and no risks," the Spanish Police said. "In particular, be aware of the fraudulent use of artificial intelligence to generate advertisements in which supposedly well-known personalities recommend investing in unregulated platforms." The head of the criminal ring was caught before fleeing to Dubai, cops said, adding that the six suspects arrested were between 34 to 57 years of age. The police did not say whether they had managed to claw back the lost funds. Suspects have been charged with fraud, money laundering, and false documentation charges, and the investigation is still open. Using celebrities to fleece would-be investors of cash in crypto scams is nothing new -- scammers have for years set up fake accounts using fake videos of famous people promising huge returns as part of internet cons.

Spanish police arrest six over $20M AI-powered investment scam

The scammers would hit the same victim repeatedly, first posing as investment managers, then again as Europol agents offering to recover the stolen funds for a fee. Authorities in Spain have arrested six people who helped operate a global AI-powered investment scam that stole over $20 million from at least 208 victims. The scammers would swindle victims up to three times. After stealing an initial sum through the investment scam, the fraudsters contacted victims twice more, masquerading as investment managers and then as authorities, offering to recover the stolen funds for a fee, Spanish police said in an April 7 statement. The scammers used deepfake ads of "national personalities" promising high returns on crypto investments, and would occasionally pose as financial advisers or even feign romantic interest to lure in victims. Experts have been warning of a rise in AI-enhanced scams. Blockchain analytics firm Chainalysis said in its Feb. 13 Crypto Scam Revenue 2024 report that generative AI is making "scams more scalable and affordable for bad actors to conduct." "Victims were not selected randomly; instead, algorithms selected those whose profiles matched the cybercriminals' searches," Spanish police said. "Once they selected their victims, they placed advertising campaigns on the websites or social networks they used, offering them cryptocurrency investments with high returns and zero risk of asset loss -- investments that, obviously, turned out to be a scam." When victims could not withdraw the funds, most realized it was a scam, according to Spanish police; however, the ruse didn't end there. The cybercriminals would then contact victims again, posing as investment managers, claiming the stolen funds were frozen and could be recovered if they paid a deposit. "The victims, hoping to finally recover their money, made the deposit without realizing they had been scammed again," Spanish police said. The scammers would then contact victims a third time, this time posing as Europol agents or lawyers from the United Kingdom, offering to return the stolen funds if the victim paid the corresponding taxes in the country where it was blocked. Related: Crypto broker breaks ankles while fleeing kidnappers in Spain Spanish authorities arrested six people involved in the syndicate, charging them with fraud, money laundering and falsifying documents in a criminal organization. During a raid on the alleged leader behind the scam, Spanish authorities seized numerous cell phones, computers, hard drives, a simulated weapon and extensive documentation. Several people linked to the plot have also been identified in other countries, and the syndicate allegedly created a large number of fake companies to channel the stolen funds. "Furthermore, the members of the organization used multiple false identities. In the case of the leader, for example, he used more than 50 different identities," Spanish police said.