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A textbook exit scam: the Juicy Fields case in detail | #socialmedia | #hacking | #aihp

This article was published in EL PAÍS FINANCIERO, a Spanish newspaper belonging to our editorial group.

  • There is less and less doubt that the cannabis investment platform could be the most recent case of fraud with tens or hundreds of thousands of users affected.
  • The whereabouts of the managers and owners of the company are unknown, while it is estimated that the total amount defrauded would amount to hundreds of millions of dollars.
  • In 48h, 17 million dollars have disappeared from a wallet linked to Juicy Fields. The blockchain analysis points to the flight with the money being carried out as we speak.
  • Those affected by the alleged scam have organized and will take joint legal action imminently.

Towards the end of the first half of July, suspicious movements in Juicy Fields increased at an accelerated pace. Reports from users about alleged blocked withdrawals began to appear on social networks and fears of an exit scam surfaced. Users realized that their money was locked up in the company’s accounts and began to fear the worst.

The situation fully exploded between July 11 and 14. An Instagram user, Zvezda Lauric, became the sole (informal) voice of the company. This person would be the platform’s communications director and, apparently, with direct contact with the CEO, Williem van der Merwe. The user claimed that the CEO had been notified by the owners that the funds would be released within 48 hours. Shortly thereafter she claimed that van der Merwe had resigned as a director.

Such a confusing situation can only have one explanation: the alleged fraudsters would be buying time to withdraw the money “cleanly”. At least, that was the understanding of the users affected by the “corralito”, who have already decided to organize themselves to take legal action against the company at various locations. The probabilities of a happy ending seem more distant, just as the presumed innocence of the owners is fading with each passing day.

Suspicions of the Juicy Fields exit scam were there from the beginning

Juicy Fields, through its platform, presented suspicious elements that made it a serious candidate to be an exit scam. For example, the high returns offered to investors raised suspicions in the media and among investment industry analysts. One of the most singular warnings came from the Youtube channel of Rankia.

In that video it is criticized that the platform gave a yield that not even the most inflated cryptocurrencies could dare to offer. But the important issue, which goes beyond the suspicions of the media, is the position of the legal bodies. Such is the case of the Spanish National Securities Market Commission (CNMV), the German Federal Financial Supervisory Authority. Both warn of a possible fraudulent organization.

Similarly, the Dutch financial authorities (AMF), where the firm was allegedly registered according to its website, also alerted users. TBBOB investigators contacted that body in late February and the response they reportedly received was that it was “probably a scam.” Although the company was duly registered in that nation, it did not hold any type of license to provide financial services.

In Spain, important media such as, at the beginning of May collected enough testimonies pointing to an upcoming exit scam. The lawyer Luis Garvía, consulted in that work expressed: “Investors are assuming a very high risk” and concluded that they “do not have any legal protection if the company disappears“.

On the other hand, when consulted by the same media about the lack of permits to offer financial products, Zvezda Lauric limited herself to answer: “we operate with the license we have to operate”.

A sea of inconsistencies

The indications of fraud presented by the Juicy Fields model are innumerable. The following is a brief review of some of the most striking ones:

  • Changes of headquarters: when agencies in various countries alerted about a possible scam, the company changed its residence.
  • Fake agreements: to gain credibility, Juicy Fields claimed to have contracts with cannabis industry giants such as Canopy Growth and Aurora. Both denied at the time having any relationship with Juicy Fields.
  • No compliance with AML laws: in countries with strict anti-money laundering laws, investment firms are forced to apply step two or KYC (know your customer). Juicy Fields claimed to get past “those hurdles”.
  • Dubious business model: The company claimed to access a gram of marijuana at a price of 20 cents on the dollar. This justified the disproportionate returns. It is worth noting that in that market, the cheapest price per gram, in very rare cases, is 80 cents.

These elements seem to be enough for the current incident to be considered a full-fledged exit scam. However, there are many more data that point in that direction. It is worth mentioning that some of them are not immediately related, but have a pattern that resembles other cases of proven scams.

In a video on social networks, JF’s communications director, Zvezda Lauric, stated that the company’s networks were hacked and were waiting to release funds. Subsequently, she notified that the CEO had resigned and disassociated himself from the firm. Image: Screenshot on Instagram

Juicy Fields returns: an impossible promise

Seen in perspective, the returns Juicy Fields offered seem completely incomprehensible. Upon entering the portal, users were presented with four options that suited their possibilities. Thus, from €50 to €2,000 could be placed in each investment, which could be repeated as many times as desired.

These are the modalities offered by the company to attract investors to its alleged cannabis cultivation business:

  • Juicy Flash: with a unit investment of 50€ and a duration of 108 days for the harvest, the return was from 68€ to 83€.
  • Juicy Haze: required an investment of 2,000€ and had a duration of 5 years (10 harvests in total). The return ranged from 900€ to 1,200€ for each harvest.
  • Juicy Kush: with €2,000, the user had to wait 4 years to conclude his participation. In that time, 12 harvests were obtained (3 per year) and with a return of between 500€ to 750€ euros for each harvest.
  • Juicy Mist: also with a one-time initial investment of €2,000, investors, within 3 years, saw a return of between €300 and €400 per harvest. The total was 12 harvests (4 per year).

The possibility of an exit scam loomed in each of these high-yield promises, which offered monthly returns of between 6% and 14%.

According to data from last June from the company, the number of users (Egrowers) of the platform exceeded half a million. Each of them could invest up to €180,000 (although as KYC was not required, users used to create more accounts to exceed this amount) and Juicy Fields claimed to have 80,000 square meters to develop their crops.

When considering the above figures, the business model proposed by Juicy Fields seems to vanish. The simple assumption that each Juicy Fields user had a single plant (the €50 minimum investment) would imply that the company would be able to grow and harvest more than 6 plants per square meter — completely impossible figures for the cannabis industry.

Rankia experts warned months ago of a possible scam company. Image: screenshot on JF website

Juicy Fields “bought” contributors from Forbes and other major media outlets

Juicy Fields showed itself as one of the most innovative companies in the sector and aggressively defended its image and reputation. To this end, it had an immediate response team in Valencia, which was dedicated to clearing up any doubts that arose along the way (it has now stopped responding). In addition, the company always boasted of appearing in Forbes and other reputable publications.

According to EL PAÍS FINANCIERO, Juicy Fields paid a Forbes contributor for the publication of an article, which now seems to have been blocked or removed by the publication’s editorial team. It is worth mentioning that Forbes states on its website that it is not responsible for the opinions expressed by its contributors.

We also have evidence that Juicy Fields paid the newspaper Estrategias de Inversión for the publication of another complimentary article. The same happened with the Colombian newspaper Portafolio, which at the end of 2021 shared this sponsored article about the alleged scam.

The article published in Forbes, now no longer available, was signed by Sophie Saint Thomas, a Forbes contributor.

Thus, to prepare the ground for the alleged exit scam, the company ran an extensive advertising campaign. To this end, it also made use of the rise of so-called social media influencers and a referral program with significant financial incentives for prescribers. These informal digital advertising agents generally have a large user base whose loyalty borders on fanaticism. Juicy Fields relied on them to gain credibility and exposure among the public.

From that, any criticism was answered by users who went out of their way to prove that the company was honest. By showing proof of payment they nullified any trace of doubt and reinforced the confidence of new investors. At this point it should not be lost sight of that all Ponzi schemes pay very well and on time. As the pyramid is being built, the money from the recent income is given to the old ones.

In other words, Ponzi’s pay out every day until the influx of users fails or until the owners decide to fold up their sails and disappear. Hence, showing proof of payment is no guarantee that a platform is legitimate.

From 105M to 88M in 48h: Juicy Fields’ money flight is underway

Once the context behind Juicy Fields is known, the pieces of the puzzle begin to fit together in a clear way. Although the platform would be buying time with distractions, some users have detected movements of tens of millions of euros in cryptocurrencies on the blockchain. One of the company’s wallets (where deposits and withdrawals are made) was tracked by a youtuber expert in cryptocurrencies and metaverse.

“The 105M in the analyzed wallet could be just the tip of the iceberg of the total amount of money defrauded”

From the channel The Crypto Era channel, the producer, who goes by the name Emilio (on Twitter, @TheCryptoEraYT), showed suspicious money movements in real time. Basically, the blockchain address associated with the Juicy Fields income and output wallet made some withdrawals. Among them, one to another wallet that held about $105 million on the afternoon of July 14. According to the youtuber’s own research, this wallet would be the one that would be concentrating most of Juicy Fields’ digital funds.

EL PAÍS FINANCIERO verified the address in Etherscan and the amounts coincide with those shown by the YouTube channel. As this account (now with a little more than 88 million dollars) is linked to Juicy Fields’ account, the exit scam is practically confirmed. At this link, you can check each of the withdrawals being executed to other wallets. Large amounts are subdivided and spread to other portfolios in an attempt to lose track.

Allegedly, Juicy Fields is currently carrying out a process called “Blending” or “Mixing”, which consists of executing thousands of seemingly meaningless moves to make it impossible to keep track of the funds.

Once theyare spread across multiple portfolios and mixed with other amounts, they fall into some exchanges from where they would be withdrawn into national currencies. For more details of data analysis, the mentioned youtuber explains the movements step by step.

Etherscan shows suspicious fund movements from addresses linked to JF’s wallet of deposits and withdrawals.

It is worth mentioning that Juicy Fields only held a portion of its funds in cryptocurrencies. A large number of users towards their investments through traditional bank deposits. The 105 million euros in the company’s allegedly owned wallet could be just the tip of the iceberg of the total amount of money defrauded.

What is being said from the side of those affected?

Although the fraudulent elements of the aforementioned platform seem obvious now, in light of the evidence, this was not always the case for everyone. Many users let their guard down in the face of the company’s strong advertising presence and actual evidence of withdrawals. Likewise, as many (probably the majority) are young people with little experience in the scam business.

Be that as it may, the news of the blocked withdrawals fell like cold water on investors. Immediately, their reaction was to organize themselves in Telegram channels to try to understand what happened. EL PAÍS FINANCIERO has been closely accompanying those affected and hearing first-hand testimonies from hundreds of them.

Some investors claim to have taken out bank loans to invest. Others explain that they have lost more than €100,000. Rumors that there may have been suicides among those affected are circulating in the community.

From the first moment, with the “corralito” to their funds, the possibility of an exit scam was seen by most of them as the most likely. However, until Thursday, some seemed to hold out hope that the funds would finally be released. Others were already clear that the matter looked like a classic textbook pyramid.

“From the first moment it all seemed very strange. When the social networks started to disappear on the 11th [of July], things looked very bad,” explains one of those affected, who chose to remain anonymous. He adds that the following days confirmed his suspicions when the company closed its networks and website and a myriad of rumors began to surface.

“They said it was a hack, nothing was clear. It seemed very strange to me that they said this was a web update,” he says.

Juicy Fields concrete exit scam
Access blocking became one of the final pieces of evidence in the Juicy Fields scam.

Legal actions to be taken against Juicy Fields

On the other hand, this media learned firsthand that those affected decided to sue the alleged fraudulent company. Since Thursday the decision was made to go to the authorities to seek justice and the leaders of those affected are looking for legal firms to guide and encourage people to denounce.

At the time of writing this article, Juicy Fields’ official spokespersons have not made any comment. Neither the owners, nor the employees, nor the managers have come forward to clarify the situation (if they have not acted maliciously). From now on, the victims entrust themselves to the authorities and await results from the judicial system.

The only unofficial information, as mentioned at the beginning, comes from the firm’s communications director, Zvezda Lauric. The most recent of her messages reads: “Today our CEO resigned and all employees are waiting for more information on the situation. Unfortunately, I have no further information on what is going on, as we have not heard anything from the directors. I hope that those responsible for the platform will fix everything,” he concluded. This media outlet attempted to contact Lauric, but did not receive a response.

A class action lawsuit is underway

Those affected are actively working with lawyers to formalize the lawsuit. The spokesperson for the affected group, who asked to be called by the pseudonym LubuntuOS explained to EL PAÍS FINANCIERO that they are cohesive and moving forward with the class action process. “We are going to try to see what we can do, but for the moment we are already organizing,” he stressed.

He explains that they are already organizing everything with legal experts, from the contract to the delivery of the data they have been collecting. He says that the options are varied and there has even been talk of the possibility of a collective lawsuit before the Audiencia Nacional.

“We will keep you informed of the steps we are taking and we will soon have news of the agreement with the lawyer,” he stresses. The company’s lack of communication, the odd movements of money from blockchain addresses linked to its wallet and the increasing rumors from former employees seem to confirm to those affected that they were victims of an exit scam.

Germany’s Federal Financial Supervisory Authority (BaFin) has not frozen any Juicy Fields accounts

Yesterday, hopeful information spread that the BaFin had frozen the accounts of Juicy Fields Holding B.V. This media outlet requested information from that body and the response is that it was not possible for them to provide details. “Unfortunately, we are unable to comment on individual matters and individual companies,” they responded to the request.

However, they explained that in these cases the BaFin cannot proceed to freeze accounts. “Generally speaking, BaFin cannot freeze accounts in case we have prohibited a public offering, because we have not approved any prospectus,” they conclude.

Juicy Fields exit scam: from hypothesis to difficult to question reality

This media, since it had early information of the blocking of funds, tried to contact the board or people related to Juicy Fields to know the official version of the company. However, all attempts were in vain and in four days the answers have been null. In fact, the company’s portal proceeded to remove the contact section.

So far, there is only informal information based on the comments of the head of communications. In the chronology of events, she stated in a video posted on her accounts that the company’s networks had been hacked. She then said that the owners of Juicy Fields communicated to the CEO the unblocking of users within 48 hours (already expired). But before the deadline expired, the same person reported that the CEO had resigned. Similarly, a letter, allegedly written by the now former CEO, became known.

In this resignation letter, van der Merwe denounces “one person” for having blocked all possibilities for a solution. Users claim to have contacted former employees, who state that they have no idea what is going on and some say they have not received their June salaries.

All these elements may lead to the conclusion that the company has gotten away with an exit scam. When asked about the possibility that Juicy Fields is a fraud, one user commented “I have no proof, but I have no doubts either”.

Individuals and groups closely linked to the company are now disassociating themselves from it, as reported in the previous article, with LC MED AG ADVANCED PHARMACY. This German company posted a deal with Juicy Fields that was deleted, but was saved in Web Archive. The von Luxburg brothers, indicated as owners of the aforementioned company, now claim to have no connection or responsibility whatsoever with Juicy Fields.

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