February 9, 2025
News

Austria’s largest fraud trial sees five sentenced in connection to $21.6m crypto scam

In a landmark case, an Austrian court has sentenced five individuals connected to the EXW-Token scam to prison, marking one of the largest cryptocurrency fraud trials in the country’s history. The sentences were handed down following a year-long trial and 60 days of hearings, during which several defendants were found guilty of orchestrating a large-scale fraud involving the EXW crypto token and the EXW Wallet.

According to local media reports, the accused promised investors high returns on the non-existent EXW token while also promoting various ventures under the EXW brand, such as a real-estate business and a car rental service. The scheme unraveled in 2020 but was briefly rebooted under the new name “Exchange World.”

Launched in 2019, the EXW Wallet was a highly sophisticated multi-level marketing (MLM) Ponzi scheme that lured in over 40,000 victims, scamming them out of 20 million euros (about $21.6 million). Investors were enticed with promises of daily returns ranging from 0.1% to 0.32%, but the operation was a complete fraud from the outset.

The funds amassed from this scheme fueled a life of excess for the criminals, described in the media as “straight out of a Hollywood movie.” The ill-gotten gains were spent on luxury cars, private jets, lavish parties in Dubai’s elite nightclubs, and opulent homes—one of which was a villa adorned with a shark tank and shoeboxes stuffed with cash.

Though based in Dubai, the group allegedly moved part of their stolen fortune to Austria. The Klagenfurt Regional Court handed down sentences based on the roles each defendant played in the scheme. Two defendants were sentenced to five years in prison, while two others received 30-month sentences, with 21 months suspended on probation. A fifth defendant was given an 18-month suspended sentence.

Throughout the trial, the defendants argued that their intention was to run legitimate investment businesses but claimed the situation spiraled out of control. The court rejected this defense, asserting that the scam was premeditated and designed with no real profits in mind. Among those convicted were EXW Wallet co-founders Benjamin Herzog and Pirmin Troger, both of whom pleaded guilty in September 2023 and were sentenced to five years in prison. A third co-founder, Manuel Batista, remains at large.

Rise of Crypto Frauds
Cryptocurrency investment frauds are becoming increasingly common, with scammers leveraging the promise of high returns and the complexity of blockchain technology to deceive investors. These schemes often involve fake projects, Ponzi structures, or misleading token offerings. Regulatory authorities worldwide are stepping up efforts to crack down on such crimes, aiming to protect investors and restore trust in the crypto market.

For example, on October 22, a fraud trial began in France against 20 individuals accused of defrauding investors out of $30 million through a crypto scam. Around the same time, an Indian national was sentenced to five years in prison for stealing more than $20 million by spoofing crypto exchange Coinbase. In the U.S., a court ordered a promoter of the Forcount Ponzi scheme to pay over $3.6 million in restitution and serve a 20-year prison sentence.

Despite the stiff penalties, crypto scammers remain undeterred. An FBI report revealed that frauds involving digital assets led to over $5.6 billion in losses in 2023, a 45% increase from the previous year. In Ireland, police reported that more than 45% of investment fraud cases in the country involve cryptocurrencies.