A 24-year-old law student from Hengelo, Netherlands, once regarded as a crypto genius, was arrested this week after going into hiding after being harassed by investor.

The man, who styled himself as a crypto banker, was pursued by his investors after his trading scheme collapsed, leaving around 300 people, including friends and family with losses totaling up to 4.5 million Euros.

Cloaking himself as a crypto genius

The suspect managed to create the persona that he was a crypto genius who have successfully created a golden mine for his investors. In actuality, he was using funds from new investors to pay for the "profits" of earlier participants.

It was also reported that he demanded his investors to invest a minimum amount of $5,000 Euros, of which he would pocket 50% of the proceeds.

While his trades initially made gains, but ultimately the mounting losses caught up with him, causing his entire scheme to collapse.

The suspect's scheme was finally exposed a year ago when the suspect broke the news to his clients that all of their investments had been allegedly wiped out.

Pretending to be the victim

After his crypto business crashed, the suspect managed to deceive and convince local police officers into thinking that he was the victim of the entire saga and he was being wrongfully harassed by his investors.

Misled by the suspect's lies, the local police chose to protect the suspect by relocating him to a safe house far away from the sights of the people he deceived.

But the collapse of him company and the threat from his victims didn't faze the suspect, as he continued to take in new clients and continued scamming more victims during his time in hiding.

Despite his disappearance, victims banded together to form a foundation aimed at investigating the missing funds. It was also because of the vital information that the foundation has found and provided to the local authorities that led to the suspect's ultimate arrest.

Authorities believe the suspect may have planned his actions in advance and are investing him for potential fradu, embezzlement, and other charges.

The rise in scams and fraud following the rise of Bitcoin

Fraud and hacks in the cryptocurrency has reached an alarming level in 2024. The total amount money lost in 2024 amounts to $2.3 billion, a 40% increase compared to the previous year.

What is more worrying is that scammers are taking advantage of the growing number of new investors drawn in by the bull market.

The frequency of crypto scams in recent months has also increased rapidly. For instance, the release of Netflix's second season of Squid Games spurred the creation of fraudulent tokens referencing the show.

The fraudulent tokens were quickly picked up and flagged by blockchain security firm PeckShield, who warned the public of the peril of these tokens.

There were also many instances where the social media accounts of numerous celebrities were hacked by scammers to promote certain fraudulent memecoins online. One of which would be the American rapper Drake, whose X account was hacked to promote the fake memecoin "Anita."

AI-driven scams have also increased significantly. Hong Kong authorities uncovered a deepfake crypto romance scam, leading to the arrest of 27 suspects accused of defrauding victims of $46 million.