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THE FINTELEGRAM COINTED-OPTIOMENT INVESTIGATIONS

Optioment is one of the largest crypto-scams in Europe with about €100 million investors paid into the scheme. It developed into an international criminal case with Austrian crypto-entrepreneur, Christopher Rieder and his crypto company Cointed involved as suspects. It appears that Cointed’s ATM and exchange services were used to transfer investors funds to Optioment and funneled back for Cointed’s expansion. Rieder embarked on a long business trip when Optioment fell apart. This is a summary of the Fintelegram investigations.


This is a summary of Fintelegrams extensive Cointed / Optioment investigations. Find the single telegrams about the case here.


Cointed

Cointed was one of Austria’s largest crypto companies, operating over 100 Bitcoin ATMs at its peak. They operated a cryptocurrency exchange and claimed to have 12,000 users. They had also planned a mining operation in Sweden. Cointed held an ICO between October 2017 and February 2018. They wanted to generate the lofty sum of 565,000 Ether and had to settle at 4,095, thus generating less than 4 Million Euro.

Entrepreneurs Christopher Rieder and Wolfgang Thaler founded Cointed in Hong Kong with their headquarters in Kufstein, Austria. Later, Charli Aho and Daniil Orlov joined the team.

Allegations of fraudulent behavior arose during the ICO. Public scrutiny revealed that Cointed was lying in their whitepaper, sugarcoated their revenues and potentially stole business ideas and code.

Optioment

Roughly around the same time as Cointed finished their ICO one of the largest crypto related fraudulent schemes fell apart: Optioment. It had started in 2016 and offered an investment scheme promising a yield of 1.5 to 4% per week. The scheme used a multilevel marketing (MLM) structure where investors could generate more income if they sold shares to friends and family. Optioment was structured in the spirit of a Ponzi-scheme. Payouts are made not by regular yields but by the collected funds of new investors. The growing need for funds not only demands increasingly aggressive sales tactics. Inevitably it leads to a crash when existing payouts can’t be served with new investments.

The stellar growth of cryptocurrencies at the end of 2017 probably prolonged the fraudulent run of Optioment. After the market corrected in January 2018 the scheme fell apart. It seems that over 10,000 investors – mainly from Austria – were scammed out of 12,000 Bitcoin, then valued at $100 Million.

Cointed and Optioment, two sides of one (Bit-)coin?

March 2018: The Vienna-based law firm Lansky, Ganzger & Partner represents 70 investors and files a complaint with the Austrian prosecution office. This claim purports that Cointed’s co-founder Christopher Rieder is one of the masterminds behind the Optioment scheme.

Several Optioment investors explain that they were referred by MLM salespeople to Cointed’s ATMs and/or exchange services to purchase Bitcoins with Euros. Fintelegram has learned about cases where the ATM transaction limits were temporarily lifted to enable large transactions into the Optioment system. This, of course, is not in compliance with generally accepted KYC standards. One involved private investigator and security specialist calls the Cointed guys “dangerously crazy idiots”. Unfortunately, a significant part of the money invested was “black” money, i.e. income that was not declared to the tax authorities. Hence, it is a bit tricky to file complaints with the authorities.

Heimhilcher, owner of a website called Bitcoins Verdienen conducted Optioment events to drive people into this Crypto-MLM. According to the Austrian prosecutor, Heimhilcher regards himself as a victim of two mysterious foreigners that allegedly vanished without a trace. He probably felt the heat of the prosecution and threw Cointed’s Christopher Rieder under the bus. He named him as the mastermind behind Optioment.

Fintelegram research shows that Cointed’s first website ran as a subdomain of Heimhilcher. This indicates direct business relations between Optioment and Cointed.

MLM structure of Optioment scam
MLM structure of Optioment scam

“It’s not us”

Meanwhile confronted with the Optioment allegations, Cointed claims that they have nothing to do with Christoper Rieders alleged actions. The business relations to Rieder were already cut by the end of 2017. Too bad that Rieder gave a video-interview in February 2018 claiming to still be on the helm of Cointed.

Fintelegram calculated Cointed’s public financial statements. We found that Cointed was not able to finance their running costs out of ATM proceeds or the ICO. Cointed must have had access to additional sources of funds.

From what Fintelegram learned over the last couple of weeks it’s more than fair to work on the hypothesis that significant parts of Optioment funds were channeled into the Cointed group and its environment and never arrived in the “Optioment system”. Cointed’s payment gateway was used to onboard investors. We can further speculate that very late into the game Optioment tried to actually create revenue via the legitimate front of Cointed. To close the circle Optioment created the demand for fiat to crypto services that fueled Cointeds ATM expansion.

Optioment and Cointed Payment Channel
Optioment and Cointed Payment Channel

 

A case of bad Karma

By the end of March, the problems of Cointed become visible. The botched ICO leaves them without the much need funds to finance their future as well as payback for their past expansion. It might be a coincidence but the planned ICO’s hard cap of $100 million is about the same size as Optioment’s fraudulent investments.

After former partners accused Cointed of fraud even during the ICO, the company creates a friendly “alternative news” campaign. The surely unsuspecting but definitely very uncritical Austrian medium “Brutkasten” published a favorable article despite the allegations. The ICO can be concluded.

In the same time, the company stops payouts of their mining scheme – which opens a new avenue of intransparent dealings.

Another Cointed co-founder, Charli Aho is listed as CEO in Austrian crypto mining company Crpyto Unity OG as well as co-founder of Swiss Crypto Group AG. In their ICO whitepaper, Cointed claimed to have merged with Crypto Unity what has been proven to be a lie. Since 2016 Rieder and Aho obviously developed an intransparent global network of companies stretching from Asia over Europe to the Caribbean. Charli Aho is a wunderkind by all means. According to his LinkedIn profile, he received a bachelor’s degree from Vienna University of Economics and Business when we just 17 years old.

The Network around Cointed and Optioment and Charli AHO and Christopher Rieder
The Network around Cointed and Optioment and Charli AHO and Christopher Rieder

Where is the money, Rieder?

By mid-April, the Austrian authorities execute a search warrant in the Cointed offices in regards to the Optioment investigations. A spokesperson of the Austrian prosecutor’s office shortly afterward says that Cointed currently is not a suspect in the criminal case. But it’s founder and former CEO is. According to his lawyer, Cointed Co-Founder Christopher Rieder is not on the run, but on a very long business trip. Somewhere, far away but he will be available for the authorities. Sometime in the future.

Meanwhile, the proceeds from Cointed’s ICO are spent. The ICO wallet-address shows a drain of Ether from 4,000 down to 40 in June. Apparently, they have been transferred to some mining wallets and from there to crypto exchange Kraken. It is currently not clear how the funds are cashed out and by whom. But we can assume it is not via Cointed ATMs. They are offline by now. As is Cointed’s crypto exchange. Due to technical reasons as an official statement says.

The noose tightens

Fintelegram opens a Cointed Claim Initiative supporting potentially defrauded customers. The first claims are registered and show that customers had deposited Fiat to Cointed’s crypto exchange but had received neither cryptocurrencies in return nor their fiat back. While Cointed claims hacker attacks for stopping the exchange it is apparent that there seem to be no funds left in the company’s accounts and wallets.

Finally, in July Cointed CEO Wolfgang Thaler enters our story. He posts a video message from China where he allegedly meets investors who are supposed to save Cointed. He claims that “two partners failed him”. He also orders employee Daniil Orlov to prepare a crypto-mining report. Otherwise “serious consequences for Mr. Orlov would be the result”. Thaler claims that all investors will receive their money back but he doesn’t sound confident.

The downfall

As Fintelegram learned from an involved lawyer Christopher Rieder confirmed in a statement to the Austrian prosecutor that he presented the Optioment scheme in a BitClub networking meeting. He still claims that he did so without actually participating in Optioment. While the other owners of Cointed always denied knowledge about Optioment this changes by the end of July. Fintelegram has been informed that one Cointed shareholder had already collected and found evidence against Christopher Rieder for months. He alleges that he has proof as well as the knowledge that puts Rieder in Turkey where he – again allegedly – spends a lot of money to escape extradition.

Cui bono? Who benefits?

This is the status of the ongoing Cointed / Optioment investigation as of the publication of this article. While there is a picture forming we still have a lot of unanswered questions:

  • what happened to the money?
  • Is Rieder the only mastermind and how many others are involved in executive positions?
  • There are first indications that Cointed / Optioment is part of a broader European scam network but we are lacking clear evidence

The Cointed / Optioment Investigations – all Telegrams

 

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