Four suspected in €8-million cryptocurrency fraud
Four men are under investigation in relation to alleged false information and market manipulation in regard to a crypto-currency they had set up and which had netted them close to €8 million.
The four were arrested early on this month.
Two of the suspects have been named by portal Delfi, citing the Geenius site, as Nils Grossber and Kristjan Ress.
Grossberg, 44, and Ress, 33, own several companies related to the cryptocurrency, known as Dagcoin, and have been involved in the scheme from the outset, it is reported.
The Police and Border Guard Board (PPA) has not made public the names of any of the four suspects.
District prosecutor Kristiina Laas says the four are under suspicion of providing false information in order to sell the Dagcoin cryptocurrency, whose price was contingent on the number of users, ie. the more people who accepted Dagcoin as a means of payment, the higher its price rose.
Laas said: "Based on the data collected so far in the course of the criminal proceedings, there is reason to believe that the suspects have artificially inflated the price of Dagcoin and the number of its users in order to attract investment, creating a public perception of its being a functional cryptocurrency which is constantly increasing in value, and which can be used as a means of payment or earn income from its storage."
Leho Lauri, head of the of the central criminal police economic crimes office, said Dagcoin's creators took advantage of a situation where the field of cryptocurrencies was practically unregulated in Estonia.
In spring 2018, four individuals, all men and Estonian citizens, set up Dagcoing, promoting it via network marketing and selling it on trading platforms created for the purpose.
This gave the impression that Dagcoin is a virtual currency whose development and sale process is conducted by independent and reliable persons, while the suspicion as noted above is that in fact it was manipulated by its co-creators.
A business license granted to an Estonian company for the provision of virtual currency services was valid for the period from June 16, 2020 to June 15, 2022, it is reported.
Proceedings are being conducted by the Central Criminal Police's economic crimes bureau, directed by the Southern District Prosecutor's Office as per standard Estonian practice.
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Editor: Andrew Whyte