Cryptocurrencies are an ideal place for scammers and swindlers. Increased anonymity, lack of control, inability to cancel transactions. All this contributes to fraud and deception. But every day users become more literate, and law enforcement officers become more skillful. Therefore, scammers come up with new tricks to steal tokens and coins.
A few years ago, a new method of deception appeared on the Internet, which can be called a KYC scam.
What is KYC/AML scam?
KYC (Know Your Client) and AML (Anti-Money Laundering).
These are special procedures for verifying the identity of clients and blocking assets obtained by criminal means. In simple terms, KYC and AML are the verification of a user’s identity. In the USA, Canada, the United Kingdom, and the European Union, regulators require all cryptocurrency services to verify clients. There is nothing wrong with this procedure itself. Typically, the client provides scans of his passport to the exchange or payment service, fills out a form, and then freely receives and sends money.
But under the guise of crypto verification, scammers have come up with a way to steal clients’ money called a KYC scam. Most often, criminals disguise their service as a completely legal crypto exchange, payment system or trading platform. The founders of the project order expensive advertising and try to convince clients that they are acting officially and legally. But in the rules for using the service, scammers specifically indicate some tricky points. For example, the rule that the administration can block or confiscate any assets if it considers them suspicious. Or that the company has the right to suspend transactions for an unlimited period.
Users rarely read the Terms of Use carefully and may not notice such clauses. They top up their balance or receive a transfer, and then… the scammers simply block their wallet.
Freewallet org is one of the main KYC scam projects
Look at the screenshot of one of the complaints against Freewallet, one of the first KYC scam projects. The user did not notice any problems with the wallet until he received the payment. And immediately his application began to show an error.
Many readers may think that this is a simple identity verification. But everything is not as simple as it seems.
The first sign of fraud under the guise of verification is ignorance from support. In the screenshot above, the user complains that his wallet has been blocked for 2 weeks, but the administration does not even respond to tickets. Everything is very simple. After being ignored for a long time, many clients will accept the loss of assets. And if the user decides to write a complaint to the police, the administration will respond that they seized the assets due to “suspicions of their purity.”
Remember, we already emphasized that KYC scammers usually stipulate in the terms of servicethe right to block wallets, demand any documents and delay verification for any time? Then look at the screenshot of the Freewallet org user agreement.
In fact, this means that the Freewallet app administration has the right to freeze any wallet without even informing the client about the reason. And such situations happen to everyone who comes to the attention of scammers.
We think that Freewallet org, founded in 2016 is one of the first KYC scam projects. But it’s not the only one. For example, there is another fraudelent crypto service, named CryptoPay.
And if you check Freewallet and Cryptopay reviews, you ll notice that users tell about similar issues.
Cryptopay and Freewallet scam victims tell about similar issues with their wallets
Main KYC scam projects have the same owners!
We came to this conclusion by studying the problem of deception under the guise of verification. Of course, we are not talking about 100% of all such cases of fraud. But the most famous KYC Scam projects actually have the same developers:
Dmitry Gunyashov. CEO of Cryptopay, possible owner of Freewallet and probably the inventor of KYC scam.
Vasily Mesheryakov. Marketing specialist. Main promoter of Cryptopay, Freewallet and many similar fraudelent projects.
Alexei Gunyashov. Dmitry Gunyashov’s brother. Several years ago tried to advertise some ponzi scheme startaps. Now probably helps his brother to steal money of Freewallet and Cryptopay customers.
Who is behind the largest fraudulent projects?
Today we have one answer to this question. The leader of all KYC scam projects is actually a native of Russia, Dmitry Gunyashov, who now lives in Portugal, but owns a business in London. We already know that he created and headed Cryptopay and Freewallet, two of the most famous scam services. Both platforms, under the guise of verification, freeze clients’ assets and then confiscate them. But Gunyashov may be involved in a number of similar projects.
Data about possible leaders of biggest KYC scams
Why do scammers manage to escape punishment?
This question can be asked by anyone who searches for the biography of Gunyashov and his accomplices. Cryptopay was founded in 2013, Freewallet — in 2016. And the owner of these projects is still at large, despite the presence of thousands of defrauded clients. Why?
The main reason is the legal literacy of scammers. They specifically carefully included in the Terms of Use the possibility of blocking assets for an unlimited period and the right to demand any documents from clients. As a result, victims lose their savings, but cannot prove the fact of deception. Formally, Gunyashov and his assistants act within the framework of the rules that the user accepted at the time of installing the application.
However, this does not mean that KYC scammers will be able to avoid punishment in the future. We have already filed a number of formal applications with the FBI, NFIB and other authorities. In addition, anyone affected by Freewallet/Cryptopay scammers can sign a petition or request free legal support from us. So all those guilty of KYC scam will definitely be punished!