fraud Archives - Coin Engineer

New Scam Method in Crypto! Attention Users!

Emre Yumlu — Tue, 17 Feb 2026 12:00:31 +0000

A new wave of scam is targeting hardware wallet owners through an unexpected channel: physical mail. As of February 2026, reports indicate that users of Ledger and Trezor have received counterfeit letters posing as official support communications. The goal is simple but dangerous: trick recipients into revealing their 24-word recovery seed phrases.

Unlike typical phishing emails, this campaign leverages the perceived legitimacy of printed correspondence. The letters feature realistic branding, formal layouts, and urgent language designed to pressure users into taking immediate action.

How the Scheme Operates

The scammer letters typically claim that a “mandatory authentication check” or “transaction verification” is required to maintain wallet access. Some warn recipients that failure to comply by a specific deadline could result in loss of access to their funds. Others instruct users to scan a QR code for what is described as a critical security update.

Scanning the code directs victims to websites that closely imitate official domains. These fake portals prompt users to enter their recovery phrases under the guise of verification. Once the seed phrase is submitted, attackers gain full control of the wallet and can transfer all stored crypto assets.

To build credibility, the letters often include reminders never to share recovery phrases online—an ironic tactic that lowers suspicion before directing users to malicious sites.

Why Hardware Wallet Users Are Vulnerable

Previous security incidents have made hardware wallet customers attractive targets. In 2020, a data breach exposed the personal information of more than 270,000 Ledger customers, including email addresses and physical mailing details. In 2021, scammers distributed tampered devices and fake executive letters urging users to migrate funds. A 2023 supply-chain compromise affecting Ledger’s Connect Kit software also resulted in significant losses tied to Ethereum-based applications.

These past exposures provide attackers with verified contact data, enabling more convincing and targeted campaigns.

How to Stay Protected

Legitimate wallet providers never request recovery phrases under any circumstances. If an unexpected letter arrives, users should independently visit the company’s official website by manually typing the address into their browser rather than scanning QR codes or clicking links.

Seed phrases must remain strictly offline and should never be entered on any website. Additional safeguards such as two-factor authentication, multi-signature setups, and regular wallet monitoring can further reduce risk.

This campaign highlights an evolving threat landscape where offline communication channels are weaponized. Hardware wallet owners must treat every unsolicited request with skepticism and rely on verified sources before taking action.

Also, you can freely share your thoughts and comments about the topic in the comment section. Additionally, please follow us on our Telegram, YouTube and Twitter channels for the latest news and updates.

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How to Avoid Scams in Crypto Markets? How to Identify Scam Projects?

Emre Yumlu — Tue, 03 Jun 2025 09:37:11 +0000

The cryptocurrency market, while attracting attention with its high profit potential, has unfortunately also become a target for scams and fraudulent projects. This guide will walk you through how to protect your crypto investments, methods to detect fake projects, and what to consider for reliable investments step by step. How to identify scam project? Let’s examine it in detail.

1. Research the Project’s Team and Background

Before investing in any cryptocurrency, thoroughly examining the project’s team is of critical importance. Reliable projects share their teams and backgrounds transparently.

Website Check: Visit the project’s official website. Are the team members’ names, experiences, and verifiable profiles on platforms like LinkedIn available?
Community and Activities: Does the team engage with the community? Are online events, updates, or development activities observable?
A lack of transparency could be a serious red flag about the project’s reliability.

2. Examine Investors and VC (Venture Capital) Support

Having solid venture capital (VC) backing behind a project is generally an indicator of reliability.

VC Investments: Which VCs have invested in the project? Are well-known names like Binance Labs, Jump Crypto, or Pantera Capital involved?
Investment Rounds: Projects go through stages like angel investors, strategic rounds, and seed rounds. Investments received in these rounds show the project’s potential and seriousness.
Caution: If a project lacks VC support or investment information isn’t transparent, it may carry a “rug pull” (quick exit) risk. In such projects, teams might sell tokens and exit the market.

3. Analyze Token Distribution and Vesting Schedule

How tokens are distributed and the vesting (unlocking) schedule affect a project’s long-term success.

Vesting Schedule: Check when and how tokens will be released to the market. Excessive token releases can create selling pressure and negatively impact the price.
Resources: You can check this information on platforms like “cryptorank.io.”
Projects with low inflation rates generally have a more stable price structure.

4. Understand the Difference Between Market Cap and FDV (Fully Diluted Value)

Relying solely on market cap (market value) to evaluate a coin’s worth can be misleading.

Market Cap: Shows the total value of tokens in circulation.
FDV (Fully Diluted Value): Reflects the project’s potential value when all tokens are in circulation.
If the FDV is much higher than the market cap, future token releases could create price pressure. Analyzing this difference plays a key role in your investment decisions.

5. Liquidity: An Indicator of Project Reliability

Liquidity shows whether a project has a healthy ecosystem.

Liquidity Pool: In DeFi projects, the amount of money locked in the pool (TVL – Total Value Locked) reflects the project’s strength. High TVL is generally a sign of reliability.
Low Liquidity Risk: Projects with low liquidity are vulnerable to rug pulls or sudden price crashes.
Check It: Examine the project’s TVL and liquidity status on platforms like DefiLlama. For example, projects like Jito or Jupiter stand out with high TVL.

6. Methods to Detect Scam Projects

Fake projects often lure investors with promises of quick profits. To identify them:

Single Exchange Listing: If a project is listed only on one exchange, be cautious. Some exchanges allow listings for low fees, making it easier for scam projects.
Lack of Liquidity: Check the project’s liquidity using tools like DexScreener. Low liquidity is a risk signal.
Lack of Transparency: If there’s no investor info, vesting schedule, or team details, the project is likely a scam.
Exaggerated Price Spikes: Sudden and illogical price jumps may indicate pump-and-dump manipulation.

7. Things to Consider When Investing

Crypto investments are risky, so a cautious approach is essential.

Risk Management: Beginners should not risk more than 10% of their total assets. Even experienced investors shouldn’t exceed 50% of their portfolio.
Education: Before diving into complex tools like futures, make sure to get educated. You can find free resources on platforms like Coinmuhendisi.com.
Research: Always check the project’s website, team, investors, liquidity, and vesting schedule.

8. Understand the Games Behind the Scenes

In the crypto market, VCs, whales, and market makers play significant roles.

VC Movements: VCs buy tokens at low prices and may sell based on the vesting schedule. This can create price pressure.
On-Chain Data: Track exchange reserves, transfers, and whale movements with tools like Nansen. For example, a large transfer could signal selling pressure.
Knowledge is your greatest weapon against scams. Always keep an eye on current data and news.

9. Reliable Projects and Examples

Some projects stand out with strong teams and high liquidity.

Aptos: A strong team, transparent activities, and $200 million in strategic investment from recognized VCs (Binance Labs, Jump Crypto).
SUI: A project with $400 million in investment and high TVL, drawing attention.
Such projects generally carry long-term success potential.

10. Empower Yourself with Knowledge

In the cryptocurrency world, knowledge is your greatest weapon against scams. Carefully analyze the project’s team, investors, liquidity, and vesting schedule. Stay away from suspicious projects and invest only in well-researched, transparent, and solid projects. Remember, crypto is a risky field, so manage your portfolio carefully and never risk all your assets.

Scam Project Detection: Useful Links

This content does not constitute investment advice. The markets involve high risk and it is important that you do your own research before making any investment decisions.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.

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$15M Crypto Laundering Ring Busted in Hong Kong

Yigit Taha OZTURK — Sun, 18 May 2025 10:00:52 +0000

Behind everyday banking routines lies a growing web of digital financial crimes. In a recent crackdown, Hong Kong police dismantled a $15 million crypto-powered money laundering operation — exposing the dark side of digital assets.

500 Accounts, One Crypto Scam

Twelve individuals were arrested across Hong Kong and mainland China in connection with a laundering ring that used over 500 bank accounts to funnel illicit funds into crypto. Fraud proceeds were routed through these accounts and converted into digital currencies at local crypto exchange shops.

Authorities discovered the group had been operating out of a residential flat in Mong Kok, turning the location into a base for planning and executing their illegal activities. Over $1.2 million was tied to 58 known fraud cases.

Busted in Real Time

On May 15, two suspects were observed leaving the Mong Kok base — one went to a bank, the other to an ATM. Both then attempted to convert the cash into crypto in Tsim Sha Tsui. Police arrested them on the spot, seizing nearly $98,540 before the money could be laundered.

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Soon after, 10 more people aged between 20 and 41 were arrested. In total, police confiscated $134,370 in cash, more than 560 ATM cards, mobile phones, bank documents, and records of crypto transactions.

According to Senior Inspector Tse Ka-lun, many suspects used bank accounts opened under friends’ or family members’ names to facilitate the laundering process.

Hong Kong Ramps Up Crypto Oversight

This case emerges as Hong Kong rolls out a more robust regulatory framework for the crypto industry. In April, new rules for exchanges offering staking services were introduced, followed by a comprehensive crypto roadmap in February focusing on compliance, infrastructure, and investor protection.

As Bitcoin, Ethereum, and other digital assets grow in appeal, so does the need for tighter security and regulation. Hong Kong’s proactive approach signals its intention to be both a hub and a safe haven for crypto innovation.

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UN Warns: Crime Syndicates Launch Their Own Stablecoins

Emre Yumlu — Sat, 26 Apr 2025 17:00:36 +0000

Organized crime networks in Southeast Asia are taking their fraudulent operations to the next level, with cryptocurrencies at the heart of their activities. According to a new report published by the United Nations (UN), despite intensified crackdowns, these criminal organizations have expanded from Myanmar to as far as Mexico.

The data reveals that Southeast Asia has emerged as one of the leading hubs for some of the world’s most lucrative cybercrime operations. The report highlights that cyber fraud in the region has grown faster than other types of transnational crimes due to its easy scalability and the ability to reach millions of victims online.

In 2023 alone, it is estimated that nearly $37 billion was lost to cyber scams in East and Southeast Asia, much of it linked to cryptocurrency fraud. Benedikt Hofmann, the UN’s regional representative for Southeast Asia, described these networks as “spreading like cancer” in his comments to Reuters.

Stablecoins Designed by Criminal Networks

The semi-anonymous and borderless nature of cryptocurrencies has enabled these criminal organizations to evade government enforcement. As authorities increase pressure on known scam hubs, syndicates are shifting operations to more remote areas or migrating entirely online. Technologies like Starlink are even being used to bypass government surveillance.

The report by the United Nations Office on Drugs and Crime emphasized that these networks are not only building scam centers but are also creating illicit payment services, unauthorized cryptocurrency exchanges, encrypted communication platforms, and even their own stablecoin projects.

One major player mentioned is Huione Guarantee — recently rebranded as Haowang. Based in Cambodia, the platform has processed tens of billions of dollars worth of cryptocurrency transactions since 2021.

Expanding their operations even further, the platform has launched its own crypto exchange, trading app, online gambling platform, blockchain network, and a USD-backed stablecoin specifically designed to dodge government regulations.

Crypto Scams Go Global

The rise of platforms like Huione Guarantee illustrates how digital assets have become critical tools for global criminal activities. These platforms provide criminals with a full suite of infrastructure, technology, and financial services.

The UN report stresses that crypto scams are no longer a Southeast Asian issue. Criminal collaborations are expanding into South America, Eastern Europe, and Africa, fueling a global network of fraud. In the United States alone, crypto-related scams caused over $5.6 billion in financial losses in 2023.

Weak governance, high levels of corruption, and limited law enforcement capacity have made parts of Southeast Asia attractive hubs for cybercrime. Massive scam compounds have been established in countries like Myanmar, Cambodia, and Laos, often using forced labor to run these operations.

The UN identifies victims from over 55 countries, predominantly from Asia and Africa, who have been trafficked and forced to scam others into sending money — usually via cryptocurrency.

Despite ongoing shutdown efforts, criminal syndicates are rapidly adapting. The UN report notes that several new virtual asset service platforms have emerged, particularly through encrypted apps like Telegram.

Finally, the UN warns that unless stronger international cooperation is achieved, the unchecked growth of these criminal networks could have global repercussions, originating from Southeast Asia but impacting the entire world.

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Illinois Senate Approves Crypto Bill to Combat Fraud and Rug Pulls

Yigit Taha OZTURK — Fri, 11 Apr 2025 11:00:19 +0000

The Illinois Senate has passed Senate Bill 1797 (SB1797) with a 39-17 vote, aiming to fight crypto-related fraud and rug pulls. Known as the “Digital Assets and Consumer Protection Act,” the law sets regulatory standards for crypto businesses operating in the state.

Under SB1797, any digital asset business serving Illinois residents must register with the state’s financial regulator. It also mandates clear and advance disclosure of all user fees.

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“A person shall not engage in digital asset business activity […] unless registered in this State by the Department,” the bill reads.

Memecoin Scams Spark Regulatory Crackdown!

The bill follows a string of memecoin scams, including the infamous Libra token, where insiders allegedly pulled over $107 million in liquidity. The token price crashed 94%, erasing nearly $4 billion in market value.

Anastasija Plotnikova, CEO of Fideum, commented: “These activities are not only unethical but also clearly illegal, with case law to support enforcement.”

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Argentina Congress Launches Investigation Over Libra Memecoin Scandal!

Yigit Taha OZTURK — Wed, 09 Apr 2025 09:30:26 +0000

Argentina’s Chamber of Deputies has approved three draft resolutions to investigate top government officials involved in the controversial Libra memecoin project, which was publicly endorsed by President Javier Milei and later collapsed, leaving investors with heavy losses.

The resolutions include the creation of a special commission to examine the Libra case, summoning key members of the executive branch, and demanding an official government report. Those to be summoned include the Chief of Staff, Minister of Economy, Minister of Justice, and the head of the National Securities Commission (CNV).

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“It’s time for Congress to examine whether Argentina has been harmed. We have a duty to uncover the truth,” said Pablo Juliano of the Democracia para Siempre party. On the other hand, Nicolás Mayoraz from La Libertad Avanza criticized the move as interference with the separation of powers.

Milei and Libra

Libra, a Solana-based memecoin, was launched on February 14 by Delaware-registered Kelsier Ventures. Within hours, President Milei promoted the token on social media platform X, claiming it would support small businesses and startups across Argentina.

His post described the token as a “private project” and linked directly to the Libra website and smart contract. The token’s value skyrocketed to a $2 billion market cap before plummeting by over 90%, sparking outrage and calls for impeachment.

Milei later distanced himself from the project, stating he had no prior knowledge of it. Meanwhile, Kelsier Ventures CEO Hayden Davis claimed he had advised Milei and worked closely with his team. Davis also admitted that the team used a “sniping” strategy to gain early profits and was involved in the MELANIA memecoin, which also experienced a sharp rise and fall.

An Argentine prosecutor has requested an Interpol Red Notice for Davis, who is reportedly behind yet another memecoin that crashed shortly after launch.

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He Invested in Crypto and Stocks with Funds from Netflix Series!

Yigit Taha OZTURK — Wed, 19 Mar 2025 08:00:44 +0000

U.S. federal prosecutors have charged filmmaker Carl Erik Rinsch with spending $11 million provided by Netflix on cryptocurrency and stock trading instead of producing a science fiction TV show.

Gambling with Netflix Funds!

In an indictment unsealed on March 18 in Manhattan federal court, the U.S. Department of Justice charged Carl Erik Rinsch with fraud and money laundering. If convicted, he faces up to 20 years in prison.

According to the indictment, Netflix (though not explicitly named in court documents) paid Rinsch $11 million in March 2020 to finance storyboarding, pay actors, and edit footage for a sci-fi TV series titled “White Horse,” later renamed “Conquest.”

Instead, prosecutors claim Rinsch transferred approximately $10.5 million of those funds into a brokerage account, where he made a number of “extremely risky” trades, including call options on a biopharmaceutical company. He ultimately lost over $5.5 million on those trades.

Luck Turns in Crypto!

According to the indictment, Rinsch was more successful with cryptocurrencies. In February 2021, he made several million dollars trading crypto, which he used to purchase $3.8 million worth of furniture and antiques, five Rolls-Royces, a Ferrari, luxury watches, and over $3 million in high-end clothing.

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The Department of Justice’s filings reveal that Rinsch also spent around $1.8 million paying off credit card debts and $1 million on legal fees. These funds were partly used to sue Netflix for additional payments and to cover his divorce-related expenses.

The Series Never Aired!

According to the New York Times, Netflix canceled “Conquest” in early 2021 after Rinsch’s behavior reportedly became “erratic.” The Times reported that Netflix had paid Rinsch a total of $55 million, while prosecutors allege he received $44 million to produce the show, which was never completed or released.

Heavy Charges Filed!

Rinsch faces one count of wire fraud, one count of money laundering, and five counts of engaging in monetary transactions involving property derived from unlawful activity. Each fraud and money laundering charge carries a maximum sentence of 20 years, while each monetary transaction charge carries a maximum sentence of 10 years.

Rinsch was arrested on March 18, and his case has been assigned to U.S. District Judge Jed Rakoff in New York federal court. His attorney, Annie Carney, declined to comment outside the courtroom, according to the Associated Press.

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Gotbit Founder Extradited to the US: Fraud Charges!

Yigit Taha OZTURK — Thu, 27 Feb 2025 07:00:36 +0000

The founder of Gotbit, a well-known market maker in the crypto industry, is facing market manipulation and fraud charges in the US. Aleksei Andriunin was caught in an FBI operation and extradited from Portugal to the US. Here are the details!

US authorities revealed that Gotbit and its executives fell for the NexFundAI (NEXF) “trap token” created by the FBI to catch market manipulators. The company allegedly engaged in wash trading, artificially inflating the trading volume of crypto assets to help projects secure listings on platforms like CoinMarketCap.

Serious Allegations Against Gotbit Executives!

The US Department of Justice announced that a federal grand jury had indicted Gotbit founder Aleksei Andriunin, along with executives Fedor Kedrov and Qawi Jalili, on charges of market manipulation and fraud. Authorities claim that the executives earned tens of millions of dollars between 2018 and 2024 through these tactics.

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26-year-old Russian national Aleksei Andriunin is also accused by US officials of transferring part of these illegal proceeds to his personal Binance account. Authorities stated that Gotbit executives admitted to using these strategies in a 2019 interview.

Facing Up to 20 Years in Prison!

If convicted, Aleksei Andriunin could face up to 20 years in prison and a fine of up to $250,000. Additionally, he could be forced to forfeit assets and repay twice the amount of illicit gains.

The US Securities and Exchange Commission (SEC) also filed a fraud lawsuit against Gotbit and its executives in October 2024. These allegations further highlight the increasing scrutiny of the crypto industry by regulators.

The post Gotbit Founder Extradited to the US: Fraud Charges! appeared first on Coin Engineer.

Woman Who Defrauded Bybit of $5.7M Gets 10 Years in Prison

Yigit Taha OZTURK — Fri, 21 Feb 2025 12:43:08 +0000

n a case heard in Singapore, Ho Kai Xin, the former payroll manager for Bybit, was sentenced to 10 years in prison for stealing $5.7 million from the crypto exchange. Ho pleaded guilty to 44 charges, and the court convicted her on several counts, including five for fraud.

Ho’s Crimes and Her Prison Sentence

Ho committed the crimes while working at the WeChain platform, which handled payroll for Bybit from October 2021 to October 2022. She falsified payroll records and transferred $5.7 million to four crypto wallets she owned. It was reported that she sent a total of $4.2 million to these wallets. The court sentenced Ho to a total of 9 years and 11 months in prison for her actions.

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Ho used the stolen funds to finance a luxurious lifestyle, including a deposit of $750,000 for a penthouse worth over $3.7 million. She also purchased high-end items from brands like Louis Vuitton, including bags, rings, shirts, and shoes. This lavish spending was funded entirely by the money she stole from Bybit.

Police Operation and Recovered Assets

Ho attempted to launder the stolen funds, but Bybit was able to recover over $1.1 million in Tether (USDT) and $140,000 from one of Ho’s bank accounts. Police also seized assets worth over $330,000, including a Mercedes-Benz car. Despite this, Ho has not offered to repay the remaining funds to Bybit.

Before the fraud was discovered, Ho misled police by claiming that her “cousin,” Jason Teo, was responsible for the unlawful transactions. Investigations later revealed that Jason Teo did not exist. Ho’s lawyer argued that her actions were a “lapse in judgment,” but the court determined her guilty.

Ho’s 10-year prison sentence highlights security vulnerabilities in the crypto industry and the rising number of fraud cases. This Singapore case serves as a crucial lesson for crypto exchanges on how they must secure their internal systems.

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How Have Solana Memecoins Affected the Network?

Yigit Taha OZTURK — Tue, 18 Feb 2025 10:30:26 +0000

The Solana network is facing rising risks with the growing popularity of memecoins. While these coins increase trading volumes on the network, some projects have resulted in negative outcomes, such as rug pulls. Additionally, how are new initiatives like the Trump Coin shaping the future of Solana?

Recently, numerous memecoins have been launched on the Solana network. These coins have gained massive attention, especially from investors looking for quick profits. However, along with this rising demand, some negative effects have started to emerge on the network.

Rug Pull Risk: The Dangerous Side of Memecoins

The rapid rise of memecoins has led to the occurrence of rug pull scams, where malicious actors withdraw all liquidity and abandon the project. This causes significant losses for investors. The Solana network has frequently seen rug pull incidents due to the fast growth and sudden collapse of memecoin projects. This can damage investor trust and have a negative impact on the network’s reputation.

Trump Coin and Investor Reactions

Another major development is the launch of Trump Coin by former US President Donald Trump. The introduction of Trump to the memecoin space has caused great excitement among investors, but it has also raised concerns in some circles. The fact that Trump Coin is hosted on the Solana network has increased interest in memecoins, but it has also created security concerns. Projects like Trump Coin can be appealing to some users, but others view these projects as speculative and risky. Memecoins are highly volatile, so investors can face sudden price fluctuations.

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The future of Solana in the face of the memecoin explosion is being shaped by several risks. The network’s capacity could be strained due to the huge demand for memecoins, potentially affecting its stability. Investors need to be aware of the potential rug pull scams that come with these coins. It’s expected that Solana will need to strengthen security measures and ensure that only reliable projects are chosen to launch on the network.

The World of Memecoins and What Investors Need to Pay Attention to

Interest in memecoins brings along high risks. The future of Solana, in terms of these projects, is likely to be shaped by rug pull risks and security concerns. Investors need to be cautious and only invest in trustworthy projects. Moreover, the rising interest in speculative projects like Trump Coin is prompting investors to be more careful.

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