- A crypto scam that claimed to be a crowdfunder for startups has seen its crypto holdings, worth $6.5 million, seized
- The Banana Fund never got off the ground, but the administrator used the funds to buy himself a house and trade
- The Secret Service and District of Columbia’s Attorney’s Office have ordered the funds to be seized and returned to investors
A crypto scam that pretended to be a startup crowdfunder has had $6.5 million worth of BTC and USDT seized by the District of Columbia’s Attorney’s Office. The Banana Fund raised millions in cryptocurrency between December 2016 and March 2018 but never became operational. Instead, the administrator used the funds for his own means, including the purchase of a house, and failed to adhere to a promise to return investors’ money to them, resulting in the authorities seizing it.
Crypto Scam Was “Self-enrichment Scheme”
The Banana Fund was established back in December 2016, marketing itself as a platform for startups to advertise business proposals and receive crowdfunding through cryptocurrency. The crypto scam amassed contributions of over ₿500 from investors up to March 2018 and claimed for months to be on the verge of opening, but in truth the administrator was using the funds for his own purposes, making tens of thousands of trades with the contributions as part of what the Attorney’s office calls a “self-enrichment scheme.”
Investors found out the crypto scam had “failed” in January 2018 and the administrator announced that funds would be returned. Instead however he withdrew ₿100 in order to buy a house and kept the rest. The investors filed a complaint with the attorney’s office who, in conjunction with the United States Secret Service San Francisco Field Office, launched an investigation.
Investors Should Get a Refund
The two agencies were able to trace the Bitcoin payments made to the Banana Fund crypto scam to a particular wallet, which still contained ₿482 ($5.63 million), from where they were also able to locate 1.72 million USDT. A seizure order was made on the wallets last week, which the authorities hope will result in the money being returned to the investors.
Worse could be to come for the administrator of the Banana Fund crypto scam, as with the Secret Service and Attorney’s Office still investigating the case, criminal proceedings could still be coming his way.