$7 000 000+ USD
DESCRIPTION OF EVENTS
"[F]rom April 2019 to July 2019" "Innovamine [described themselves as] a cloud mining company that could mine Bitcoins using pooled resources, splitting the profits." "Innovamine.io is a state-of-the-art cloud mining service offering users a safe, secure and hassle-free way to purchase all the hashing power they would need to mine cryptocurrency. They can do all this without the hassle of intricate software installation or buying expensive hardware. Innova Mine’s solution provides mining power to anyone who needs it."
"For the cloud mining of Bitcoin, Ethereum, and Litecoin, there is no better company than Innovamine. Innovamine is one of, if not, the most renowned cryptocurrency mining companies across the globe. The company has set a target to become the best by next year, and with the expertise of its professional miners, it is well on track to achieving that goal. Innovamine believes so much in the growth of cryptocurrency mining, and base their values and norms in the satisfaction of their ever-growing clientele."
"Innovamine.io is also making plans to start cloud mining other cryptocurrencies within the coming years and would be adding more computing power and a new cryptocurrency trading page aimed at creating a seamless experience for clients." "InnovaMine is poised to become one of the world’s leading BTC, ETH, and Litecoin cloud mining companies within the next couple of years." "We have just opened our doors to customers from across the world, and our goal is to become the leading company by 2020."
"Auzins claimed that investors could contribute digital assets to Innovamine, and then the company would perform mining activities and provide investors with a daily "automatic payout . . . in whichever coin they mine."" "Our team members are mining experts from a vast array of scientific backgrounds with one thing in common - immense faith in the power of cryptocurrencies. We believe in the future of cryptocurrencies and digital currencies which is why with InnovaMine, you will be joining a budding group of cryptocurrency enthusiasts."
"Website appeared to be an investment website, operating a bitcoin mining farm in the Ukraine, but registered in Australia (INNOVATRADE PTY LTD, ACN 631-027-391)." "InnovaTrade PTY LTD is a registered company in Australia and is regulated by the Australian Securities & Investments Commission." "Company number: 631 027 391" "INNOVATRADE PTY LTD (ACN: 631027391) was incorporated on 16/01/2019 in Australia."
"Over the months, since its inception, Innovamine has worked with 5220 clients, cloud mining 1637.78 BTC, 1637.78 LTC, and 2519.06 ETH over that period. For its Bitcoin Mining, Innovamine uses a Minimum Hashrate of 1.3TH/s, the Antminer s15 hardware, and produce coins of up to $153.84 per 10TH/s. For their Ethereum Mining, they use a Minimum Hashrate of 5MH/s, the Innovamine GPU Rigs hardware, and produce coins of up to $40.00 per MH/s. For Litecoin Mining, Innovamine uses a Minimum Hashrate of 30MH/s, the Antminer 1.3 hardware, and produce coins of up to $6.66MH/s."
"Maintenance fees and a 2-year contract are included for the mining of the three coins, with an automatic payout coming in whichever coin they mine for clients. We have algorithms in place to ensure that miners are allocated the fastest, most efficient pools to compensate for a possible loss in hashing power. That way you don’t lose any mining capability."
"As a cryptocurrency mining company, we have seen the acceptance of cryptocurrency mining grow and so it is only fair that our user base grows exponentially as a result of our impeccable packages and our unique business model."
"Innovamine.io avails its users with the opportunity to not only mine to get more cryptocurrency but to trade also using the three major cryptocurrencies on the platform, namely Bitcoin [BTC], Ethereum [ETH] and Litecoin [LTC]. Our service is novel and refreshingly beneficial to our clients and partners as Innovamine currently stands as the only firm to offer a dual-earning opportunity such as this to all interested persons." "Innovamine has made it that when users are trading, the usual commission that should account to the management from trading is redirected as earnings for the miner so that they experience profit regardless of the mining result."
"In keeping the wheel of success spinning for our users, we have decided to keep at this thereby holding back to earnings for ourselves but rather giving all trading commissions back to our users. This defines a lot about our selfless disposition and competitive advantage over a lot of other mining houses there are."
"Promising that investments would be made back in approximately 1 month. This worked for 2 or 3 months, people would receive earnings from the bitcoin mining operation every day. And they were able to transfer these earning to a bitcoin wallet on other external websites."
"In fact, Innovamine was a Ponzi scheme that crashed in July 2019." "There were in operation till July 15th; they took their customers' crypto and shutdown their site." On July 15th, 2019 they stopped "all the payments and blocked [the international Telegram channel]." "[O]n july 15th it became clear that this was an exit scam. On that day it was not possible anymore to withdraw earnings anymore. Shortly after, the telegram channel (official communcation channel, linked to on the website) was deleted. A little later 1 of the moderators by the name Lera created the communication channel again and explained that the owners of the website were running an exit scam."
"They [later] reappeared as innovamine.ltd with an identical website and taking orders again." Innovamine says: "Hey guys, we just created this new group to inform you all that we were attacked by hackers and we are working on getting the platform back very soon. Stay tuned for more updates."
"Thankfully the invested amount from our customers is safe and still there but we don’t know to whom they belong personally. In order for us to know that we need to accept new deposits from our customers so we can get back each user ID number from that deposit based on the Wallet Address that was used to make previous deposits."
"Every individual will need to send 15% of their total amount deposit in order for us to place each deposit into the split division of the Hashrate to regain access to the lost ID Number and get control back to the accounts of every member and send your money back to your BTC Wallet Address."
"Please do not send less or more than 15% of the total amount deposit. The new deposit which will be made to gain access and get the account back will be also transferred to your Wallet Address. During our time trying to fix the problems we came to this conclusion which is the only way to regain every detail that was lost and deleted when the cyber attack happened on July 15, 2019."
"[W]ell the end of the day and they took 71 [more people's bitcoin] @0.71241719 for a total of $7,450.47 and i have not seen the btc address's return any btc to the 71 [people's] wallets."
"Ivars Auzins defrauded U.S. and foreign investors through the unregistered offer and sale of digital asset securities in an initial coin offering and a purported digital asset cloud mining program. Auzins allegedly used fake names, fictitious entities, and fraudulent profiles to perpetrate his schemes, and misappropriated nearly all of the investor funds that were raised."
An SEC "complaint charges Auzins with violating the antifraud and registration provisions of the federal securities laws, and seeks permanent injunctions, including conduct-based injunctions, disgorgement plus prejudgment interest, civil penalties, and an officer-and-director bar against him."
"As we allege, Auzins was engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities," said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. "We will continue to detect and pursue those that seek to victimize investors in the digital asset space."
"Reported losses to this scam were over $7 million. Innovamine operated out of Ukraine, but as the company was registered in Australia many overseas victims reported to Scamwatch. Eighty-two per cent of reports were from overseas, with losses of $5.9 million."
Reddit user IncaKush reports he "lost over $4k+ this Ponzi scheme had so much potential but idiots decided to deposit $100k+, I seen people with half a million deposit. Because of idiots like that, greedy bastards who wants to be rich quick. They decided to do exit scam this quick. This could have lasted for a year at minimum."
"Do NOT invest anything that you are afraid to lose. I myself invested even tho it is a ponzi scheme lol. Dude they don't even take maintenance fees lmao every other mining company takes 15 cents for per TH.. and any other company sells 100Th/s for $5500 and InnovaMine sells it for $1500 lol"
Reddit user QuickQuestion2214 reports he "dipped [his] toe in with $200 a few weeks back to see if the returns were true seemed very fishy. 3% daily returns COMPOUNDED. [He] got about $15 back before the red flags. The first red flag was having trouble withdrawing coins."contact support" [stuff] like that. Now the website is completely down."
Reddit user stefbeau reports "It worked fine for a few months, and created big hopes. I lost about 60% of my investment so not happy at all. But I feared that day would come, it just came sooner than [I] expected."
Reddit user JandrusTV reports "Innovamine.io is a total scam. Innovamiene stole me 900 dollars. On the 15th no money withdrawals could be made, on July 16 the website disappeared. On July 17, they opened a new Web Innovamine.ltd and created a new Telegram group. On the new website they posted a message saying they had been hacked and had lost all accounts, but kept all the funds intact."
"To recover the funds you had to send 15% of what you had invested in btc along with your data, id, and wallet where you made the last entry (you had to do it before 6 hours). All this to steal more money. Today July 20 I go back and a new 6 hours counter has been activated, they want to steal more money. I have entered the address where they want us to enter money and there are people who are paying (do not do it!) It is all a lie!"
On August 26th, 2022, "Ivars Auzins, a citizen of Latvia, was extradited to the United States on a six-count indictment charging him with wire fraud, securities fraud, and conspiracies to commit wire fraud and securities fraud in connection with the operation of eight companies that purported to offer, invest in or mine digital assets. Auzins will be arraigned on the indictment tomorrow in federal court in Brooklyn before the Honorable Roanne L. Mann."
“Auzins perpetrated a brazen scheme in which he fleeced investors who funneled millions of dollars into fraudulent cryptocurrency,” stated United States Attorney Peace. “This Office will continue to vigorously investigate and prosecute those who lie and steal from investors, including those like the defendant who operate from abroad.” Mr. Peace thanked the Securities and Exchange Commission, New York Regional Office, for their assistance during the investigation.
InnovaMine claimed to be a profitable cloud mining platform, where investors could deposit crypto-assets and earn a return, supposedly coming from mining. To build legitimacy they claimed registration with the Australian Securities & Investments Commission, and pointed to the valid registration of a company InnovaTrade PTY, which anyone could search up on the securities commission public OpenConnect website. They also demonstrated multiple videos of a mining facility in a warehouse, which are still publicly viewable on YouTube. The videos, which may have been taken from other facilities, featured audio specifically pertaining to the InnovaMine opportunity.
The InnovaMine service paid profits daily and regularly during it's operation, building trust with users, right up until the July 15th, 2019. The SEC has reported losses of at least $7m in their complaint, however the total figure may actually be higher. Ivars Auzins was found to be behind the scheme. Charges were brought in December 2021 and he was finally extradited from Latvia in August 2022.
HOW COULD THIS HAVE BEEN PREVENTED?
A key issue here is a lack of details provided to the investing public by the Australian Securities & Investment Commission. Their service could be used to search up and confirm the registration of InnovaTrade PTY, which indeed had valid registration as business number 631-027-391. While it's unclear what information was available at the time the InnovaMine operation was running, information presently available falls far short of the level of detail which would allow someone to know that InnovaTrade is unrelated to InnovaMine. This fundamentally allowed many investors to come to the conclusion they were investing with a regulated entity.
Investors need transparent information regarding how their funds are backed and secured, ideally in a consumable form provided by a rotating list of auditing firms. There should be funds available to assist victims when things go wrong. An effective community insurance fund could be managed by industry.
Wayback Machine (Jul 17)
IS INNOVAMINE A SCAM? : InnovaMine (Dec 8)
InnovaMine with payment proof ( Free Bitcoin Mining ) Legit 100% - YouTube (Dec 8)
SEC.gov | SEC Charges Latvian Citizen With Digital Asset Fraud (Dec 8)
INNOVAMINE.io - The most profitable Mining and Trading Platform - AMBCrypto (Dec 8)
InnovaMine: The Most Competitive Cloud Mining and Trading Company | CryptoCompare.com (Dec 8)
Facebook (Dec 8)
Innovamine.io (Dec 8)
https://connectonline.asic.gov.au/RegistrySearch/faces/landing/SearchRegisters.jspx (Dec 8)
INNOVATRADE PTY LTD - Australia Company (Dec 8)
REPORTING INNOVAMINE SCAM: : InnovaMine (Dec 8)
REPORTING INNOVAMINE SCAM: : InnovaMine (Dec 8)
Innovamine.io another video of facility - YouTube (Dec 8)
INNOVAMINE - Best Cloud Mining Company innovamine.io - YouTube (Dec 8)
innovamine.io Cloud mining - YouTube (Dec 8)
Innovamine - YouTube (Dec 8)
InnovaMine.io inside of the mining facility rooms - YouTube (Dec 8)
Innovamine.io one of the mining facility rooms - YouTube (Dec 8)
InnovaMine.io MINING FACILITY - YouTube (Dec 8)
Latvian Individual Extradited for Securities Fraud and Wire Fraud in Cryptocurrency Scheme | USAO-EDNY | Department of Justice (Dec 8)
Ivars Azuins Was Extradited to the United States, Charged with Wire and Securities Fraud (Dec 8)
Latvian Extradited to US for Wire Fraud Involving Crypto Investments – Bitcoin News (Dec 8)
Site unreachable : InnovaMine (Dec 8)
Question about total funds lost : InnovaMine (Dec 8)
Bitcoin / Address / 3CrdKSruK8u4tZhAoarTExg5dHxTymYAB1 — Blockchair (Dec 8)
innovaMine.ltd is DOWN OFFLINE OFFLINE : InnovaMine (Dec 8)
innovaMine.ltd BIG RED FLAG : InnovaMine (Dec 8)
innovaMine.ltd BIG RED FLAG : InnovaMine (Dec 8)
Website back online...not fully functioning yet : InnovaMine (Dec 8)
Just for the sake of debate : InnovaMine (Dec 8)
CENSORSHIP WARNING : InnovaMine (Dec 8)
Reddit - Dive into anything (Dec 8)
request just sent to Innovamine staff; will update if they answer... : InnovaMine (Dec 8)
Your opinion : InnovaMine (Dec 8)
I was skeptical at first : InnovaMine (Dec 8)
Suspicious: Who has cloud mined the longest? : InnovaMine (Dec 8)
Scam in the end.. : InnovaMine (Dec 8)
Facebook (Dec 8)