A Promising Start Ends in Collapse
Dutch police have arrested a 24-year-old law student from Hengelo over allegations of operating a fraudulent cryptocurrency investment scheme that defrauded nearly 300 investors of €4.5 million ($4.6 million). The suspect, once lauded as a "crypto genius," is accused of embezzling funds and running a Ponzi scheme.
According to reports, the scheme initially delivered significant profits, earning the trust of investors, including local footballers who contributed large sums of money. However, in 2024, the accused and his brother informed investors via email that all funds, including their own capital, had been lost.
Victims Take Action
The fallout from the scheme prompted hundreds of victims to join the Stichting Onderzoeks Collectief Hengelo, a collective formed to pursue justice. Lawyer Arjon Tieman of Damsté and Partners led the group in filing complaints against the accused.
Police spokeswoman Chantal Westerhoff confirmed the arrest earlier this week following extensive investigations. Authorities raided the suspect’s residence and collected substantial evidence, including testimonies from victims. Some allege that the student continued soliciting investments even after the scheme had collapsed.
Allegations of a Ponzi Scheme
The suspect is accused of operating a Ponzi scheme, using funds from new investors to pay earlier ones. The scheme required a minimum investment of €5,000 ($5,146), with the accused allegedly taking 50% of profits as fees.
“The intent to defraud is evident,” said a judiciary spokesperson. Victims claim that the suspect deliberately misled them about the scheme's profitability while enriching himself.
Ongoing Investigation
The police have confirmed that the student will face extensive questioning in the coming days. Authorities are working to determine the full extent of the fraud and identify any additional victims.
This case serves as a stark reminder of the risks associated with unregulated crypto investments, emphasizing the importance of due diligence and skepticism when evaluating high-return schemes.
