Police Arrest Founder of Blockchain Startup That Raised Over $80M

Dutch police have arrested the founder of blockchain game development startup Komodore64 that allegedly raised 78 million euros ($86 million) from investors, business-focused news outlet Sprout reported on Nov. 

Komodore64 — which launched in June with the objective to create a game platform where transactions are tracked on blockchain — appeared to be a fraudulent scheme that deceived both investors and its own employees. The project and its native crypto coin K64, which have reportedly secured roughly $86 million in investments, have declared bankruptcy.

Involvement of a “well-known investment company”

Komodore64’s founder Sam N. allegedly lured investors claiming that the project had raised funds from a “well-known investment company” — American investment management firm Goldman Sachs — when, in fact, a group of individuals impersonated a delegation from the investment firm. 

The company’s employees claimed that the launch party cost tens of thousands of euros, however, neither the suppliers nor the employees received their bill. Komodore64’s employees filed for bankruptcy for the company.

More deception and angry crypto investors

Moreover, Komodore64 curator John Dullaart said that Max Theyse, who had previously been presented as the company’s co-founder, never occupied that role. “I think that N. presented him as such. The real co-founder is someone else. This person says he is surprised that the co-founder was someone other than himself,” Dullaart told Sprout.

The police seized N. at a hotel, where he had reportedly been staying because he felt threatened by angry cryptocurrency investors.

Dutch police vs. cyber criminals

This summer, Europol, in conjunction with the Dutch police, United Kingdom’s South West Regional Cyber Crime Unit, Eurojust, and the U.K.’s National Crime Agency, coordinated the arrest of six people suspected of stealing over $27 million in cryptocurrency.

In May, Dutch police arrested former entrepreneur Barry van Mourik for fraud after he allegedly conned investors in a fake Bitcoin (BTC) mining operation out of €23 million ($25 million). Posing as the operator of a mining farm, van Mourik accrued client funds while allegedly failing to purchase any equipment, instead reportedly spending the money on luxury items.