HotNews No. 160: How Modern Crypto Scams Operate: An Analysis of the “Crypto Family” Project

When marketing narratives are stripped away and promises of “passive income” are set aside, most modern crypto scams reduce to the same underlying structure:
funds from new participants are used to pay earlier participants, without any genuine economic activity or sustainable business model.

One illustrative example of this model is the Crypto Family project, which operated as a classic MLM / Ponzi scheme, disguised as a “crypto community.”

Who Is Behind Crypto Family?

According to data published by the specialized investigative platform BehindMLM, Crypto Family was led by Nebojsa Katic, an individual previously associated with multiple MLM and Ponzi-style projects, including Lyoness and similar schemes.

In its promotional materials, Crypto Family presented itself as a “Central European” project. However, its official website listed a business address in Dubai, a jurisdiction frequently identified in international analyses as a hub for unregulated MLM and crypto investment schemes.

Crypto Family first appeared in 2022 as a promoter of existing Ponzi schemes (Ultron/Mavie Global), before quickly launching its own proprietary model.

How the Scheme Operated

Phase One: “Crypto Mining”

In its initial phase, Crypto Family offered so-called mining packages with promised returns of 10% per day, a figure that alone constitutes a clear red flag.
This version of the scheme collapsed relatively quickly.

Phase Two: “Crypto Family 2.0”

In late 2022, the project was rebranded as Crypto Family 2.0, built around:

• NFT “investment positions”
• an internally issued token (Family Token – FT)
• mandatory reinvestment and restricted withdrawals

Participants invested USD 24 per NFT, with promised returns of 8.33% per day over 90 days (approximately USD 180 in total).
Crucially, returns were not paid in fiat currency, but in an internally generated token, issued at will by the project, with no intrinsic market value and no verifiable backing.

Payment Control and Forced Reinvestment

A key mechanism used to prolong the scheme was the fragmentation of “profits” into multiple designated pools:

• one portion could be withdrawn only periodically,
• one portion had to be given to newly recruited members,
• one portion was forcibly locked via staking,
• one portion could only be used to purchase additional NFTs.

In practical terms, most funds were never genuinely accessible to participants, but instead served to maintain the appearance of system growth.

Additionally, punitive withdrawal fees were imposed, reaching up to 30%, effectively discouraging participants from extracting funds from the system.

Core Tools Used to Attract Victims

Regardless of branding or claimed technological innovation, modern crypto and MLM scams rely on a highly consistent set of mechanisms. Crypto Family / Family Token is simply one example of this broader pattern.

Common elements include:

• “exclusive” offers and limited availability, creating artificial urgency (FOMO),
• exceptionally high daily returns with no economic justification,
• high and variable withdrawal fees,
• vague or false claims of asset backing (gold, oil, real estate, mining),
• unverifiable teams and questionable business addresses.

Why Do People Fall for These Schemes?

Testimonies from affected investors and recurring patterns across cases point to the same underlying factors: greed, naivety, and a lack of understanding of risk.
Many participants believe they have “entered early” or that they are more knowledgeable than others.

Scam operators deliberately exploit this psychological vulnerability, relying on a simple but effective promise:

“Give a little today, and we will promise a lot tomorrow.”

Conclusion

Crypto Family is not an anomaly, but rather a representative example.
Names, platforms, and technical narratives change, but the underlying mechanism remains the same.

In crypto, as elsewhere, there is no such thing as fast, easy, risk-free profit.
What exists instead are recurring variations of old fraud models, repackaged to align with current trends.

Victims of this crypto scam may report their losses through the website where the case has been opened, thereby joining the criminal complaint. The only way to recover the full amount of the invested funds is by initiating court proceedings against the responsible parties.

Your Defenfme team