An Austrian court has just handed down a major crypto fraud verdict. Five people were sentenced to prison for the EXW-Token scam: two received 5-year terms, two others each received 30 months (with 21 months suspended), and one person received an 18-month suspended sentence. This is one of the largest cryptocurrency fraud cases in the country’s history. The trial lasted one year, with 60 days of court hearings.

This EXW scam is pretty outrageous. They promised investors a daily return of 0.1% to 0.32%, but that so-called token simply does not exist. In addition to issuing fake tokens, they also used the EXW name to set up real estate companies and car rental services. The EXW wallet was launched in 2019. In essence, it was an MLM-style Ponzi scheme that trapped at least 40,000 investors and stole more than 20 million euros. After the scheme collapsed in 2020, they tried to restart it under the name Exchange World and keep going.

All the money they got fooled out of was squandered by these people. They spent on luxury cars, private jets, top nightclub parties in Dubai, and even a bathtub for raising sharks inside a villa, with stacks of cash piled in the cabinets. What’s interesting is that they transferred some of the proceeds to Austria. Notably, two co-founders, Benjamin Herzog and Pirmin Troger, pleaded guilty as early as September 2023, and each was sentenced to 5 years. Pirmin Troger and Herzog were the main driving forces behind the scam; they carefully designed the entire scheme. The third founder, Manuel Batista, is still at large.

The court’s judgment was very straightforward. It said this was not a case of a project going out of control, but rather a fraud that had been meticulously planned from the very beginning. The defendants argued that they originally intended to carry out a legitimate investment project, but things went out of control. The court simply did not buy it.

Crypto fraud cases are increasing. Just in 2023, the FBI recorded losses of more than $5.6 billion, up 45% from 2022. Irish police reported that more than 45% of investment fraud cases in the country involve crypto assets. In recent months, similar cases have been popping up one after another. On October 22, France launched a trial involving a crypto fraud ring with 20 people, defrauding investors of $30 million. Not long ago, in India, an individual was sentenced to 5 years for impersonating a major exchange to steal more than $20 million. In the United States, a Ponzi scheme was ordered to pay more than $3.6 million in compensation, and the perpetrators also face 240 months in prison.

What’s interesting is that despite these harsh verdicts, it seems the scammers have not slowed down. This points to a problem: risk prevention in the crypto market is still not sufficient. High-return promises, complex blockchain technology, and all kinds of flashy projects have become tools for scammers. Regulators around the world are stepping up their efforts, but it’s clear more still needs to be done.