Vitae coins in eye of storm: Bannister Lawyers assists victims of scam as part of this preliminary investigation
It recently came to light that a major investigation is underway into scams committed by the social media platform linked to 'Vitae.co' and the website 'Vitaetoken.io'. The investigation into the scam - a file of the federal prosecutor's office - is being led by an investigating judge in Mechelen. In cooperation with several local police districts, the federal judicial police and Europol, many assets, including luxury cars, watches and cash, have since been seized and five suspects have been arraigned and arrested.
Mr. Jorgen VAN LAER and Mr. Thomas SPAAS -who have been acting as lawyers for a group of victims from the beginning of this investigation- are closely following the developments in this investigation.
After all, crypto currencies have their dangers. Not only the currency and its intrinsically unpredictable value can cost people dearly, but so can the fraud opportunities that crypto currencies offer create victims and hands that are left empty.
Articles with garish titles like "Belgians lost at least 3 million euros in crypto coins last year" have not raised lawyers' eyebrows for some time. After all, fraud involving crypto-currencies and blockchain technology is extremely common. While any new market or technology always has a certain attraction for impure practices, the attraction of crypto currencies to these impurities seems to be particularly strong. The "anonymity" behind the blockchain (the underlying technology of crypto currencies) and the lack of regulation appear to be a breeding ground for all kinds of crypto fraud.
That cryptofraud is a trend is certain. As specialists in this field, we are increasingly confronted with victims of crypto fraud.
In this article, from our experience in this matter, we try to give you a concise overview of the most common "crypto crimes" and their criminal qualifications.
A false sense of security
Crypto coins are based on a cryptographic system and are therefore often labeled as secure. In principle, only the owner of the private key (private key that provides access to the crypto wallet) can trade or transfer his crypto tokens. In principle, because cryptocurrency transactions are cryptographically encrypted and transmitted, it should be almost impossible to hack transactions, steal crypto coins or create crypto coins of one's own.
However, many crypto crimes just take place because one manages to obtain such private keys, either through simple theft or hacking. Another possible cryptocurrency crime that one can fall victim to today occurs because crypto tokens are maliciously marketed that are not actually there.
Theft with false keys (art. 467(1) Criminal Code) or computer fraud (art. 504quater Criminal Code)?
Crypto coins are susceptible to theft. By this we mean theft as it is popularly used. Yet the legal qualification of "taking" crypto coins has often been questioned in recent years.
Transferring crypto tokens to one's own wallet after obtaining the private key unlawfully (e.g., through hacking or taking away a physical code) can legally qualify as theft with fake keys.
Indeed, according to criminal law, keys are all mechanisms that open or close a lock (here: access to the crypto wallet), such as cards, passwords, number combinations and electronic impulses. Consequently, the private key that provides access to the crypto wallet can be considered a "key" within the meaning of the criminal code. If that key is used against the will of its owner, then that key is criminally considered a counterfeit key.[1]
It follows that a person who unlawfully misappropriates a private key and uses it to appropriate crypto tokens - which do not belong to him - is guilty of theft with false keys.
More recently, however, since the entry into force of the new Article 504quater Criminal Code, the fraudulent acquisition of a pecuniary advantage for oneself or for another by means of data manipulation no longer falls within the scope of Article 467, paragraph 1 Criminal Code [2]
Consequently, if there is "data manipulation" within the meaning of Article 504quater of the Criminal Code, the crime should be classified as computer fraud and no longer as theft.
The fraudulent removal of crypto tokens implies a manipulation of the underlying blockchain and the data that make up its building blocks and can be considered a "data manipulation."
The difference between the qualification of the crimes of "theft with false keys" and "computer fraud" is not merely theoretical, but also entails consequences in terms of sentencing and burden of proof.
External hacking (art. 550 bis Criminal Code)
Breaking into an information technology system to obtain a private key qualifies by itself as the crime of external hacking.
Indeed, he who knowingly and intentionally obtains admission to an information system to which he is not entitled is guilty of this crime.
The fact that an offender's intent in taking crypto currencies is to gain an advantage for himself (a fraudulent intent) makes the crime even more heavily punishable (cf. art. 550bisStrafwetboek) than the basic crime of hacking. [3]
Swindling - offering crypto coins that turn out not to be any (art. 496 Criminal Code)
"If it's too good to be true, it is," is the slogan of the awareness campaign through which our government is trying to warn the public about large-scale cryptocurrency fraud.
Cryptocurrency is booming, and scammers know it, too. By capitalizing on the hype that crypto-currencies bring, scammers easily succeed in making people believe that empty boxes are mountains of gold.
Promises like "if you invest 100 euros, you will get back 1000 euros" and "a monthly payout of thousands of euros is not unusual" make the necessary dose of healthy suspicion disappear in many. With well padded lectures, meetings and convincing websites, investors are convinced to invest more and more and more in crypto currencies. "Later you will then reap the benefits," they claim.
In reality, these fruits are very often simply not there. Well-organized scammers often know from the beginning that such fruits will never be there either.
Such conduct qualifies as the crime of fraud. After all, one pretends to dispose of things, referred to in article 496 Sw. that belong to another person, by using cunning artifice.
However, proving the crime of fraud is not easy. (read more here)
When you become the victim of such a scam, you do well to respond quickly and professionally.
How to respond.
Bannister's expertise in cases involving crypto fraud is vast. From her experiences in previous cases, Bannister learned that every crypto fraud case must be handled with due diligence, expertise, speed and appropriate strategy. After all, one file is not the other.
Bannister also offers victims of cryptofraud the opportunity for group representation. By pooling the common complaints of several victims, Bannister ensures that the investigation is steered in the right direction, namely toward a positive outcome.
Would you like more information about your options as a victim of crypto fraud or would you like to be assisted by a specialized lawyer? Please feel free to contact us at info@bannister.be or at 03.369.28.00.
[1] Antwerp Feb. 25, 1994, Limb.Rechtsl. 1994, 81; Corr. Bruges July 19, 2000, RW 2000-01, 918, note.
[2] Cass. (2nd k.) May 6, 2003, AR P.03.0366.N
[3] Art. 550bis §3 Sw.
