UNKNOWN

DECEMBER 2018

ROMANIA

COINFLUX

DESCRIPTION OF EVENTS

Founded prior to October 2015, "COINFLUX SERVICES S.R.L., [is] a limited liability company incorporated in Romania with Commerce Registry number J12/3685/08.12.2015 and Company Unique Identifier 35303244, and whose registered office [was] at 199 Calea Turzii, Biroul 3, Cluj-Napoca, Cluj, Romania"

 

"Best service in Romania. 24 hour trading. Buy or sell digital currencies anytime. Live chat support. Fast SEPA payments. Receive EUR the next business day. We deliver digital currencies to your wallet within 15 minutes." "Over 201 million EUR exchanged in 203,147 transactions." "CoinFlux advertised itself as a 24-hour marketplace that provide a local fiat gateway for Romanian traders. The exchange had been preparing to celebrate its third anniversary with zero transaction costs."

 

"Digital currencies, and blockchain technology in general, are in the early stages of development; not yet consumer-ready. CoinFlux was born out of a vision; interacting with digital currencies should be easy and frictionless, and we work towards this goal every day." "[W]e assist the early adopters and enthusiasts in getting easy access to the digital currencies they believe in. We continuously upgrade our services and improve our pricing model. We started by exchanging bitcoin, then we were the first exchange service in the region to add Ether, Litecoin and Ether Classic. More currencies and tokens will follow."

 

"Due to a recently started, unexpected investigation, we are in the unpleasant situation of temporarily stopping any digital currency exchanges. Unfortunately, our company’s bank accounts have been frozen, situation which affects the CoinFlux wallets as well. We are doing all possible efforts, along with our legal advisers, to make sure everyone who had money deposited in CoinFlux wallets gets it back."

 

"Another unpleasant consequence of the investigation is the fact that our access to some parts of our platform has been restricted, thus we are unable to send this announcement through the usual communication channels: e-mail and website. Our expectation is that we will gain control back, within the next days. We are aware that this is a worrisome situation for the people who have placed their trust in our service, and we assure each and every one of them that we will do everything that’s up to us to fix this unfair situation. We will get back to you with updates on the progress."

 

"We have undertaken a series of actions, in order to speed-up the return of the funds left in CoinFlux wallets back to our customers." "We are aware that this is a worrisome situation for the people who have placed their trust in our service, and we assure each and every one of them that we will do everything that’s up to us to fix this unfair situation."

 

"We’ve sent MisterTango (the Financial Institution hosting our frozen bank account) a list of people who have money blocked in CoinFlux wallets, as well as the exact associated balances, and the instruction to transfer those funds back into the clients’ bank accounts."

 

"We have officially informed MisterTango that 100% of the funds within the CoinFlux bank accounts belong to our customers, thus the money should be returned to their rightful owners and this action should be treated as priority."

 

"[T]o me it`s clear they will not send the money back to the customers..no update/no delay..it`s been a long time and they could have give us at least some updates..they have our contact e-mails from coinflux platform."

 

CEO "Nistor was arrested in December 2018 on an international warrant and was extradited to the U.S." "Călin [was] reportedly arrested by the U.S. authorities after a note from a secret service agent accused him of knowingly helping to launder proceedings of criminal activity committed on the territory of the United States." "US law enforcement had been building their case against Nistor for quite some time."

 

"In his statement in court, Vlad Nistor said he established the trading platform after working for seven years in the financial sector. “When you try to grow a business, you don’t think of committing crimes, because the value of that business is diminished,” stated the 29-year-old Coinflux owner, as quoted by the Romanian news agency Mediafax."

 

"Protection Nistor believes the actions of the authorities illegal. The lawyer of businessman Anatol the Panzar has stated that the fraudsters launder the money for Coinflux without the knowledge of his client. He Nistor maintains his innocence."

 

"On February 18, 2016, SA Coleman sought and obtained a search warrant for, among other items, “the contents of all emails, chats, or stored communications associated with the [Google] account . . .” and “[a]ll data associated with the use of the Location History and Web History between the dates of December 11, 2015, through December 18, 2015” that could be found in Nistor’s Google account in connection with many of Google’s services, such as Google Drive, Google Docs, Google Photos, Google Maps Engine, Google Calendar, Google Wallet, Google Chrome, and Web History (among many others). Eventually, utilizing the information obtained from Warrant 1, law enforcement sought and obtained six additional warrants for targeting Nistor’s Google account, his Amazon web services account, and domain www.coinflux.com." "[T]he Supreme Court held that the Fourth Amendment protects “the people of the United States against arbitrary action by their own Government; it was never suggested that the provision was intended to restrain the actions of the Federal Government against aliens outside of the United States territory.”"

 

"As Judge Aldrich eloquently put it: [A] conspiracy is like a train. When a party knowingly steps aboard, he is part of the crew, and assumes conspirator's responsibility for the existing freight—or conduct—regardless of whether he is aware of just what it is composed." "The Indictment does not charge Nistor with a regulatory violation or inadequate policy implementation; it charges him with knowingly participating in a conspiracy to launder fraud proceeds."

 

"Such activities are not enough to charge an exchange operator of fraud, as there already are a few exchange operators who have been already banned due to such illegal activity but still move around freely." "But, if we are looking into the case of Vlad Nistor, it is totally opposite in nature as he was the only one who actually advised fraudsters on the ways and means to indulge in such illegal activities using his crypto exchange."

 

"On June 16th, Vlad-Călin Nistor—the owner of crypto exchange CoinFlux—and 14 of his associates entered guilty pleas for their involvement in an international cryptocurrency scam. According to the U.S. Department of Justice, this crime ring was responsible for fraudulent online auctions used to launder money through Nistor’s cryptocurrency exchange, where they would exchange cryptocurrency for fiat and then deposit the funds into bank accounts under the names of CoinFlux employees and family members." "The defendants were involved in a racketeering conspiracy and online auction fraud, defrauding millions of dollars from U.S. residents by selling goods that didn’t actually exist."

 

"[M]embers of the racketeering scheme would impersonate different people over the phone, including eBay customer service representatives and military members trying to sell items before deployment." "Placing fake ads on eBay and Craigslist, defendants lured victims into paying for valuable items such as cars without any intention of following through on the transaction." "To mask their true nature, the group used stolen IDs and stolen valor, pretending to be US military personnel trying to shift their gear before heading off 'on tour.'" "To maintain the appearance of legitimacy, Nedelcu created fictitious entities through which he purported to sell vehicles. Once Nedelcu and his coconspirators convinced victims to purchase falsely advertised goods, they sent the victims invoices for payment that appeared to be from legitimate sellers, such as eBay Motors." "To lull anxious buyers into a false sense of security, Nistor and his cohorts even set up a pretend call center."

 

"The federal authorities had identified and arrested 14 people who were indulged in such fraudulent activities, and Vlad Nistor was the one among them. He was the one person having great ties with businesses he was associated with. Also, he had been in touch with various members involved in cybercrime through Telegram. He had reportedly helped these people with solutions on how to indulge in such illegal activity without leaving the slightest of a hint to the police department for further suspicion."

 

"Regarding the investigation, Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division commented, “Today’s modern cybercriminals rely on increasingly sophisticated techniques to defraud victims, often masquerading as legitimate businesses.” He continued, “These guilty pleas demonstrate that the United States will hold accountable foreign and domestic criminal enterprises and their enablers, including crooked bitcoin exchanges that swindle the American public."

CoinFlux was one of Romania's oldest cryptocurrency platforms, and served customers for several years without notable issue.

 

At the end of 2018, it was revealed that the CEO had participated in laundering funds for an American auction fraud scheme. While the CEO initially denied the allegations, he later pled guilty in American court.

 

As far as could be determined, the company notified the bank holding the funds that they were the property of customers, and customers who held funds on the platform were still complaining after some time that they had not received any funds back.

CipherTrace Cryptocurrency Crime and Anti-Money Laundering Report 2020 (Jun 19)
CoinFlux - Buy, Sell, Trade, bitcoin, ether, litecoin and ripple (Jul 12)
Crypto Exchange Owner Admits Laundering $1.8M in Online Auctions Fraud - CoinDesk (Jul 12)
@CoinFlux Twitter (Jul 12)
@cec_coco Twitter (Jul 12)
UPDATE: 15 Decembrie/ December 15th | by Alexandru Coman | CoinFlux (Jul 12)
Owner of crypto exchange CoinFlux pleads guilty to money laundering (Jul 12)
Founder of Romanian Crypto Exchange Coinflux to Be Extradited to US on Multiple Allegations (Jul 12)
Owner of crypto exchange CoinFlux pleads guilty to money laundering (Jul 12)
Coinflux CEO admits to laundering $1.8 million of Bitcoin - Decrypt (Jul 12)
Owner of Romanian Exchange Coinflux to Be Extradited to the US – News Bitcoin News (Jul 12)
CoinFlux - YouTube (Jul 12)
Fifteen Defendants Plead Guilty to Racketeering Conspiracy in International Cyber Fraud Scheme | OPA | Department of Justice (Jul 12)
Coinflux's CEO, Vlad Nistor, Included in Fraudulent Issues (Jul 13)
The owner of the crypto currency exchange Coinflux extradited to the United States - The Cryptocurrency Post (Jul 13)
Coinflux Cryptocurrency Exchange Founder Extradited to the U.S. for Money Laundering (Jul 13)
CoinFlux trading floor owner pleaded guilty to money laundering (Jul 13)
UNITED STATES OF AMERICA, Plaintiff, v. VLAD-CALIN NISTOR, Defendant. (PDF) (Jul 13)
UNITED STATES V. NISTOR (CaseMine) (Jul 13)
UNITED STATES V. OLOGEANU (CaseMine) (Jul 13)

Sources And Further Reading

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