Dutch Police Arrest Three in Pump-and-Dump Scheme Involving Self-Made Cryptocurrency
The arrests resulted from an investigation of the cryptocurrency exchange Coinhouse.eu.
Dutch police arrested three men in the industrial town of Deventer for attempting to defraud investors by selling them a self-made cryptocurrency and then intentionally sinking its price.
- The police charged the men with fraud and embezzlement, and did not rule out additional arrests.
- Police arrested one of the men at a Deventer warehouse that held several computers used for mining cryptocurrency. There “was also an issue of electricity theft,” according to a press release posted on the website of the National Dutch Police.
- The arrests stemmed from an investigation of the cryptocurrency exchange Coinhouse.eu, which authorities have suspected of embezzling customers’ money and defrauding them.
- In what authorities described as a pump-and-dump scheme, one of the men, a 39-year-old, produced the cryptocurrency and advertised it on a cryptocurrency platform and Twitter, luring investors and boosting the price. He then sold a large volume of digital coins over a short time frame, rendering them “worthless.”
- The 39-year-old man is also suspected of similarly trying to scam investors using ERSO, MALC, EUROP and TulipMania digital currencies, the press release said.
- During the investigation, police seized a house, vehicles, computers and cryptocurrencies.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.