An Austrian court has sentenced five individuals involved in the EXW-Token scam, marking one of the largest cryptocurrency fraud trials in the country’s history. Local media reports indicate that the sentencing followed a year-long trial and 60 days of hearings, during which the defendants were found guilty of orchestrating a fraudulent scheme centered around the EXW crypto token and the EXW Wallet.
The accused allegedly promised victims high returns on investments in a non-existent token while promoting other ventures under the EXW brand, including a real estate business and a car rental service. The EXW Wallet, launched in 2019, operated as an elaborate multi-level marketing (MLM) Ponzi scheme that defrauded at least 40,000 investors out of approximately €20 million (around $21.6 million). The scheme falsely promised daily returns of 0.1% to 0.32%.
Although the scam collapsed in 2020, it was reportedly rebooted and rebranded as Exchange World. Funds amassed by the perpetrators were used to support a lavish lifestyle described as “straight out of a Hollywood movie.” The defendants enjoyed luxury cars, private jets, and extravagant parties at high-end clubs in Dubai, even decorating their homes with opulent items, including a villa featuring a shark tank and shoeboxes filled with cash.
The operation was primarily based in Dubai, with some of the stolen funds allegedly funneled to Austria.
Sentencing Details
The Klagenfurt Regional Court sentenced two of the defendants to five years in prison, while two others received 30-month sentences, with 21 months suspended for a three-year probationary period. Another defendant was given an 18-month suspended sentence. The defendants claimed their intentions were to run legitimate investment projects, but the court dismissed this notion, stating the fraud was premeditated with no real profits intended.
Benjamin Herzog and Pirmin Troger, co-founders of the EXW wallet, previously pleaded guilty to fraud in September 2023 and each received five-year prison sentences. The third co-founder, Manuel Batista, remains at large.
Rise in Crypto Fraud Cases
Investment fraud using cryptocurrencies has become increasingly common, with scammers taking advantage of the allure of high returns and the complexity of blockchain technology. Such schemes often involve fake projects, Ponzi-like structures, or misleading token offerings. Regulatory authorities around the world are intensifying efforts to combat these fraudulent activities to protect investors and maintain trust in the cryptocurrency market.
On October 22, a trial began in France involving 20 individuals accused of a crypto scam that swindled investors out of $30 million. Recently, an Indian national was sentenced to five years for defrauding investors of over $20 million by impersonating the crypto exchange Coinbase. Additionally, a U.S. District 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 these harsh penalties, scammers show no signs of abating. An FBI report revealed that cryptocurrency-related frauds and scams led to over $5.6 billion in losses in 2023, a 45% increase from the previous year. Similarly, Ireland’s national police force reported that over 45% of investment fraud cases in the country involved cryptocurrencies.
