This crypto fund says it tripled investors’ money. The catch? It’s owned by a convicted fraudster

A crypto fund which claims to have always made a monthly return is facing renewed scrutiny after an investigation revealed ties to a convicted fraudster.

Documents verified by DL News confirm that Luc Schiltz, who was found guilty in a Luxembourg court on charges of fraud and money laundering, is a joint owner in the Crypto4Winners venture. He’s listed as a general partner in company records.

According to Luxembourg court authorities, Schiltz was sentenced to six years in prison in 2017 for, among other crimes, defrauding nearly 60 victims out of over $1.5 million through fraudulent investment schemes.

After serving just over two years of his sentence, Schiltz was released on probation in 2019.

He is now involved with Crypto4Winners, which he owns jointly with the firm’s managing director and fellow Luxembourger Adrien Castellani.

“I don’t think many customers of C4W are aware that Luc is the general partner of the fund,” George, a crypto investor cum investigator, told DL News. George spoke to DL News on the condition his name was changed to protect his identity.

Nowhere on the Crypto4Winners website does it list Schiltz as an owner or general partner at the company.

George said he first became aware of Crypto4Winners when he heard about it advertising its consistent high rate of return. He decided to look into the company to document it, just in case it turns out to be too good to be true, he said.

This investigation led him to uncovering the involvement of Schiltz, while at the same time becoming troubled by the firm’s lack of transparency.

“The most worrying part for me is that I know they’ve been doing marketing in real life, going to companies doing presentations,” George said. “They’ve probably pulled in a lot of people that don’t have a clue.”

George maintains the lack of transparency surrounding Crypto4Winners and Schiltz’s involvement, coupled with the firm’s unusually consistent profits, are red flags.

Schilitz has a minimal online presence, and DL News’ attempts to reach him via social media and email were unsuccessful.

The revelation of Schiltz’s involvement comes as Crypto4Winners faces a penalty for not providing annual accounts in Sweden, where the firm is incorporated.

DL News did not find any Crypto4Winners customers who reported losing assets through the firm.

What is Crypto4Winners?

The concept of Crypto4Winners is simple: investors entrust their Bitcoin, Ethereum, and stablecoins to the firm, which then invests and trades them on their behalf.

How exactly the firm uses investors’ crypto assets is not immediately clear. The Crypto4Winners website says it only uses 50% of deposits for daily trading, while the rest is kept as mid- and long-term holdings.

In an August question-and-answer session held on Google Meet, Castellani told viewers that a team of five traders — including Schiltz — traded customer assets on behalf of Crypto4Winners.

He added that the company’s traders are deliberately kept isolated from each other so they don’t know each others’ strategies.

The firm boasts a return of 377% on customers’ Bitcoin deposits since 2019, and claims to have produced returns of between 3% and 20% every month it has been active.

Firms offering to invest customers’ crypto assets on their behalf are not uncommon in crypto investing. Several similar firms, such as Freeway, Finblox, and Haru have previously lost their customers thousands of dollars amid accusations of mismanagement and foul play.

And it’s unclear whether Crypto4Winners’ 4,000 customers are unaware of Schiltz’s involvement and the lack of transparency, or just don’t seem to mind.

“Many people I’ve interacted with who invest in the fund seem to be indifferent to how returns are made, as long as they’re made,” George told DL News.

On the Crypto4Winners Reddit forum, users routinely discredit calls for greater transparency as “FUD” — an acronym for fear, uncertainty, and doubt that’s used to sum up negativity directed toward a project or company, regardless of whether it is warranted.

“Some of the information presented regarding Luc Schiltz does worry me,” said one user posting under the handle Capable_Ad288. “But I do feel that someone is having fun spamming irrelevant information that they see as red flags.”

Crypto4Winners reportedly told customers in June last year that Schiltz’s acts as an external consultant for the company, and that “he is not involved in any management or business decisions.”

At the same time, Crypto4Winners also said its management team had commenced financial negotiations to sell Schiltz’s shares in the coming weeks.

DL News asked Crypto4Winners co-owner Adrien Castellani about Schiltz’s ownership and position in the company. He declined to comment.

Company documents retrieved in January show that Schiltz is still a general partner, and has unlimited liability for Crypto4Winners. Castellani, on the other hand, only has limited liability.

“It would only make sense to take on most liability if you know what’s going on,” George said.

Client, not partner

The Crypto4Winners website highlights its many accolades, partnerships, and media appearances.

The firm promotes that it is a member of the “Crypto Valley” — an area of Zug, Switzerland that has become a hotbed for crypto firms — despite being incorporated in Sweden.

While the Crypto4Winners doesn’t list the identities of its leadership, a section dedicated to its team says the firm is composed of “highly qualified professionals, well-versed in new technologies such as the internet, blockchain, and asset management.”

The Crypto4Winners website also lists as partners Ledger Enterprise, the institution-facing arm of hardware wallet provider Ledger, and Chainalysis, a top crypto security firm.

Chainalysis told DL News that as a matter of policy, it does not disclose customer identities unless it is a coordinated effort with a customer.

A 2022 X post from the official Ledger Support account said that Crypto4Winners is one of its clients, and not a partner.

Requests for reports

In October 2023, the Swedish companies regulation office, Bolagsverket, ordered C4Wave Capital, the company behind the Crypto4Winners platform, to provide annual reports of its accounts for 2021 and 2022.

After additional requests, the firm failed to provide its reports by the November 23 deadline. The firm now faces a fine for not submitting the requested reports.

A representative from Crypto4Winners reportedly said that the requests from Bolagsverket were automatically generated.

“We have consulted with legal experts and relevant authorities on this matter. After thorough review, it has been confirmed that, given our status as a Trust Management Company, we are not required to submit public financial statements,” the representative said.

But George maintains that Crypto4Winners is explicitly required to produce such reports.

According to George, this is because when customers send their crypto to Crypto4Winners, it goes to wallets owned by legal entities in Dubai. Schiltz and Castellani own shares in C4Wave Capital via those entities, he said.

“If they held it directly, they would not need to produce such reports,” George said.

Bolagsverket confirmed to DL News that when someone requests a company’s accounts, as in the case of C4Wave Capital, it must submit them, regardless of the type of company it is registered as.

Such reports would go a long way in reassuring Crypto4Winners’ customers.

“Investors need to demand transparency,” George said, adding that companies like Crypto4Winners are antithetical to the purpose of cryptocurrency as a decentralised and trustless system that eliminates the need for intermediaries.

But for now, trust is all customers have.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.