By CCN.com: Authorities in the Netherlands have arrested a suspect who allegedly operated a bitcoin mining investment scam, according to Dutch daily De Gelrderlander. The fraudulent scheme which was reportedly started in 2017 earned the man named Berry van Mourik at least €2 million ($2.24 million). Berry was apprehended in Apeldoorn, a city in the Dutch province of Gelderland.
Per the publication, van Mourik was a senior executive of two firms which sold bitcoin mining rigs. He sought investors to buy rigs with the understanding that he would operate the bitcoin mining operations on their behalf. The suspect promised the investors monthly returns of 0.3 bitcoin. At the current prices this is about $2,382.
However, the investors neither got the promised returns nor the mining rigs they purchased. Investigations have revealed that the mining rigs were never bought. van Mourik is believed to have spent the money on a lavish lifestyle. This included gambling, travelling and buying luxury cars and motorbikes. The home and business premises belong to van Mourik were raided last year and some of his possessions seized.
Not His First Bitcoin Scam
Per the Dutch anti-fraud agency, FIOD, about 100 people are estimated to have been defrauded by Berry.
This is not the first time that van Mourik is getting into trouble with the law. In February 2018, an Amsterdam court declared his bitcoin mining firm Koinz Trading bankrupt.
Dutch bitcoin mining farm Koinz Trading declared bankrupt https://t.co/PSJhQINYtd
— Ikki (@ShadeStar81) February 16, 2018
The bankruptcy followed the company coming under the same accusations as van Mourik is facing currently. As Telegraaf reported then, Koinz Trading had lured Belgian and Dutch investors into putting their money in bitcoin mining rigs.
No Mining Rigs or Mined Bitcoin, Just Empty Promises
However, the investors never got the mining rigs nor the mined bitcoins. Per the publication, each investor had put in around €3,000. Some of the investors had indicated that whenever they approached van Mourik he offered excuses. This ranged from saying he had a problem with suppliers in China to saying he had been defrauded by an associate to claiming he was undergoing emergency eye surgery.
Then van Mourik denied the accusations leveled against him saying it was just a ‘business conflict with some customers’.
While still significant, the Dutch bitcoin mining scam pales in comparison both in sophistication and scale to a similar one reported earlier this month in China. According to 8BTC, a crypto mining scam operated by blockchain firm Lianxin Tech saw victims lose around $300 million. The scam was uncovered earlier this month by Chinese police.
China’s Filecoin Mining Scam
The fraudulent scheme selling mining machines specifically aimed at mining the Filecoin cryptocurrency. The machines could also mine Lianxin Tech’s own CAI token. Over 300,000 mining rigs, each unit priced at approximately $840 were sold.
Lianxin Tech lured investors by informing them they could recoup their investment within two months. At various points in time, the price of the CAI token rose from $0.072 to $0.20 to $0.29. Consequently, many investors bought hundreds of such mining rigs hoping to make a killing.
Unknown to the investors was the fact that the exchange the CAI token was listed on was under Lianxin Tech’s control and was being manipulated. The scam unraveled when an investor found her mining machines were generating the CAI tokens during an electricity cut!