Malaysia Police Make Arrests in Cryptocurrency Fraud Scheme

Late last month, police in Malaysia arrested three men for their alleged roles in a cryptocurrency fraud scheme. According to local media accounts, the three men are accused of stealing the equivalent of over $2,500,000 worth of cryptocurrencies from twenty different victims.

TRM Labs is proud to support the Royal Malaysia Police (RMP) in its effort to identify and disrupt illicit use of virtual currencies. 

The alleged fraudsters told victims they could generate as much as a 50 percent return on their investments, however, the subjects instead stole the victim’s money for personal use laundering the proceeds of the fraud via cryptocurrency. 

Malaysian authorities were able to track fraud proceeds on multiple blockchains simultaneously resulting in the identification of the fraudsters and seizure of stolen funds. Those funds will be forfeited and used for restitution to the victims. 

Speaking to local media, the director of the Bukit Aman Commercial Crimes Investigation Department (CCID), Datuk Seri Ramli Mohamed Yoosuf said that "Malaysian criminals prefer to use cryptocurrency in their illicit activities" because they perceive crypto transactions as "difficult to trace." The Bukit Aman CCID's crypto unit found that "nearly 90% of cryptocurrency-related crimes are linked to investment fraud." A total of 5,507 crypto investment fraud cases were recorded between 2019-2023, with losses totalling ~RM417m (~USD90m).

However, Bukit Aman CCID's crypto unit "is now able to identify diverse transactions with digital currencies using commercial technology." Datuk Ramli explained that crypto-related crimes were "easily traceable" because "everything which utilizes blockchain technology has a unique trait," providing a "trail" for investigators. 

In addition to the recent arrests, Datuk Ramli highlighted two other cases, one involving a 24-year-old hacker who allegedly attempted to sell personal data extracted from government databases on the dark web. The other case involved the kidnapping and murder of Malaysians in the Philippines in which police successfully traced the ransom payments through a crypto wallet and identified the perpetrators. The intelligence was passed to Philippine authorities who apprehended the suspects.

For more “Must Know Crypto Investigations” in Asia Pacific read our Insights here.