Security First: Kriptomat’s Systems Successfully Put a Stop to Fraud in Croatia, Recovering A Substantial Amount Stolen from Victims

Kriptomat’s robust security systems and swift cooperation with authorities prevented a severe case of international IT fraud, stopping cybercriminals from converting stolen municipal funds into cryptocurrency.

During the Christmas holidays, hackers successfully infiltrated the IT systems of a small Croatian municipality. They attempted to transfer funds into a mule account opened at Kriptomat, a regulated cryptocurrency exchange. The hackers made three transactions in an attempt to convert the stolen funds into cryptocurrency. However, Kriptomat’s automated monitoring systems flagged the transactions as suspicious and high-risk and immediately blocked them before any cryptocurrency was purchased.

“Kriptomat is committed to transparent business practices and detecting suspicious activity, supporting law enforcement, and ensuring that digital finance benefits everyone. That’s why we have also systematically implemented various measures to protect further and guard against fraud. In this case, our prompt action effectively stopped the money from being converted to crypto and likely being withdrawn to external crypto wallets that are beyond our control,” said Kriptomat’s COO, Dejan Davidovic.

Kriptomat’s team contacted the people behind the account and began communicating with them via email. While maintaining contact with the hackers, we gathered as much information as possible regarding the transactions and reported it to the authorities.

At the same time, Kriptomat reached out to potential victims. Our efforts led us to the small municipality in Croatia where the funds originated. The victims confirmed that they had indeed suffered a cybersecurity breach and unauthorised withdrawals from their bank accounts.

With the evidence in hand, the authorities launched an official investigation. Kriptomat collaborated closely with authorities in both Estonia, where Kriptomat is headquartered, and Croatia throughout the investigation. “Once we received clearance, we were able to return the stolen funds to the victims in early January. Their gratitude was heartfelt, recognising that the timely intervention had prevented significant harm to the municipality’s public finances,” said Davidovic. 

Now, more than two years later, the official investigation is complete. We recently received a thank-you letter from the mayor of the town, expressing gratitude to Kriptomat for helping stop the crime and for protecting their local budget from severe damage.

Moreover, the case demonstrates how cryptocurrency platforms, often wrongly assumed to be tools for illicit activity, can serve as strong allies in fraud prevention when operated transparently and responsibly.