Cyprus played a crucial role in busting an Austrian cryptocurrency scam that resulted in six arrests across three EU countries, it emerged on Thursday.

According to an announcement from Europol, late last year, a total of six individuals were arrested in Austria, Cyprus, and Czechia. Cyprus police confirmed that one of the suspects was apprehended in Larnaca.

Europol and Eurojust supported the investigation targeting the creators of a seemingly new cryptocurrency launched in December 2017. Law enforcement conducted six house searches, resulting in the seizure of over €500,000 in cryptocurrencies and €250,000 in fiat currency.

Additionally, dozens of bank accounts were frozen, and assets including two cars and a luxury property worth €1.4 million were seized.

Between December 2017 and February 2018, the scammers pretended to establish a genuine online trading company that issued a new cryptocurrency. The initial coin offering (ICO) involved an offer of 10 million tokens, with investors paying in established cryptocurrencies such as Bitcoin or Ethereum.

To gain credibility with investors, the Austrian fraudsters also claimed to have developed their own software and a unique algorithm for the sale of the tokens.

According to Europol, traditionally, an ICO will build upon transparency and communicate clearly about each team member responsible for it.

“In this instance, there was a lack of transparency regarding both the team members involved and the algorithm underpinning the cryptocurrency,” the announcement said.

In February 2018, the perpetrators abruptly closed all social media accounts and took down the fake company’s website, signaling an exit scam. Many investors realised they had been defrauded at this point, though not all victims have been identified yet.

Europol’s specialists organised five operational meetings and worked hand-in-glove with the Austrian desk at Eurojust, providing a holistic analysis picture of the investigation.

Europol also deployed a specialist with a mobile office to Cyprus to facilitate information exchange.

Austrian police officers assisted in operations in Cyprus, providing guidance on cryptocurrency seizure and aiding in the interrogation of the main suspect.