Sometimes cryptocurrency fraud, among other things, ends up with record fines. For example, just yesterday a Texas court ordered the former head of Mirror Trading International Proprietary Limited to pay 3.4 billion dollars in damages. The reason for such a large fine was the organization of an international fraudulent scheme for multi-level marketing.

In short, the company attracted cryptocurrency from victims and paid them high interest. The scheme claimed that a unique trading bot provided the returns, but in fact it did not exist. The whole thing was therefore just a pyramid scheme – albeit using digital assets.

A total of 23,000 victims were affected by the project. They lost the equivalent of $1.7 billion at the time the money was sent.

How cryptocurrencies are stolen

712 bitcoins at the current exchange rate of the major cryptocurrency are worth approximately $21 million. The criminal stole the coins from his brother Larry Dean Harmon in February 2020, with Larry being arrested some time before that. At the time of the theft itself, the value of the BTC reached $4.8 million.

Larry Harmon was arrested for running the Helix cryptomixer, which was used to mix cryptocurrencies for the sake of hiding their owners’ traces. According to Decrypt’s sources, the illegal platform processed more than 350,000 BTC in transactions between 2014 and 2017. In addition, Helix actively collaborated with some darknet marketplaces, i.e. platforms outside the normal internet.

As early as 2021, Larry Harmon was found guilty of money laundering and conducting illegal transactions. In addition to the criminal charges, Larry Harmon was fined $60 million by the Financial Crimes Enforcement Network (FinCEN). This was the first fine imposed on a cryptomixer.

Law enforcement authorities seized cryptocurrency wallet devices from the accused, which initially could not be accessed due to certain security features. Gary Harmon was able to “covertly” send himself 712 BTC from the device, recovering the cryptocurrencies using his brother’s passwords. Harmon then transferred the bitcoins to two cryptomixers to further confuse the trail.

However, the use of such services did not help the accused to evade law enforcement. And it was a rather foolish move on his part, as he was one of the first to be added to the list of suspects as a relative of the perpetrator. This news also serves as vivid proof of how advanced intelligence agencies’ tools have become in tracking financial flows within the Bitcoin blockchain.

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Overall, the Harmon brothers are only a small part of the crypto-related underworld. Much more trouble is caused by organised groups of fraudsters and hackers. Their losses for April 2023 amounted to $103.7 million, according to a recent report by CertiK analysts. Experts also found that the total amount of losses since the beginning of the year due to the activity of digital criminals is $429.7 million.

In April, most of the losses came from major events. First place went to a series of attacks on MEV bots, which brought in the equivalent of $25.3 million for fraudsters. In second place was a hacking attack on the Bitrue trading platform with a loss scale of $22.03 million.

Among the biggest projects whose developers disappeared with investors’ money, the biggest losses are related to fraudulent startup Merlin DEX, which brought in $2.7 million for its creators. Ordinals Finance, 6827 Token, fcdep and ZKLOTTO also feature in the ranking, according to Cointelegraph.

Fraudsters and hackers remain a major negative factor for the crypto market. Their threat holds back the infusion of big capital into the industry, and also leads to a slowdown in the development of bona fide crypto projects.

That said, crypto still has a bad reputation right now, as it has been affected by the collapse of the FTX exchange in November 2022. However, the current banking crisis is forcing investors to take a different view of digital assets. Still, the latter are decentralised and most often have predetermined inflation rates – a serious advantage in the current economic climate.


The scale of crime in digital assets remains quite high, which scares novice investors in one way or another. However, as current events show, sometimes there is liability for such actions - which is good news for buyers of coins and tokens. Still, the latter in such circumstances may realise that the loss of cryptocurrencies does not necessarily mean their eventual loss.