The Marvin Steinberg Case
How a fraudster posed as an ICO expert and stole millions from hundreds of thousands of investors
Crypto currencies have created a lot of excitement throughout the last years and have produced a wide variety of innovative business models. While blockchain business entrepreneurs in the US quickly evolved into celebrated pop stars, the German community is more reserved and has been shaped by only a few people. If you’re looking for ICO experts in Germany, you will quickly stumble upon the name Marvin Steinberg. Steinberg, who was born in 1988 in Bendorf, Germany, seems to be connected to various blockchain companies, which, according to himself, he was significantly involved in as a majorly responsible expert.
But recent revelations suggest that Marvin Steinberg not only cheated on his former business partners, but also stole money from numerous private investors who were eagerly looking for innovative types of investment. To cover up his actions, the inconspicuous-looking German made immense efforts ranging from intercontinental journeys and smear campaigns conducted from Russia – up to hiding from prosecution.
Marvin Steinberg: “We collected 250,000,000 USD from investors”
There is a specific company that lead to Marvin Steinberg getting busted: Karatbars. The Stuttgart-based company has been selling the blockchain currency KaratCoin since 2011. It is the first digital currency that’s backed up by physical gold reserves. This basically crisis-proof concept, within a short period of time, convinced many crypto enthusiasts and private individuals in their search for a sustainable form of investment.
Karatbars decided to partner up with Marvin Steinberg for their ICO. According to the company, he presented himself as the leading ICO expert in Europe – the same way he introduced himself to other previous companies. According to him, he had already collected over 250 million euros in capital from investors throughout his career. Also, he stated he had already carried out several ICOs for market leaders in the past. These and other ‘facts’ are still publicly visible on the website of his own company named MyICO Agency: https://dev.myicoagency.de/
Marvin Steinberg promised his clients the full-service-care-free package that many service agencies offer, which included technical support, funding as well as the ongoing coin distribution management.
Anyone looking for previous articles about Marvin Steinberg will quickly find confident claims regarding his connection with Karatbars as his agency client. In an online interview (which is flagged as ‘sponsored content’), Steinberg proudly states that he managed to collect “more than 30 million US dollars” from investors. He was also recorded as a speaker at numerous corporate events that his clients hosted. The fact that Steinberg initially provided services for Karatbars and many other companies is well documented. At this point, however, it remains unclear whether the ‘expert’ was able to convince with his work or not.
The perfidious scam by Marvin Steinberg
Piece by piece, new details about Steinberg’s former business relationships are coming to light – some of which are likely to cause surprised faces: In the case of Karatbars (and most likely other ICO clients as well), Marvin Steinberg hid significant amounts of coins from the eyes of his business partners as well as hundreds of thousands of private investors who used the platforms. It caused millions of dollars of losses for those parties.
His aim: He used the tokens and coins, which he himself had previously advertised and offered to financially strong investors, and then sold a major share illegally via third parties. Due to his agency being completely in charge of the technical ICO and coin management, he was able to shadow the financial transactions for a long time. This allowed him to repeat his crime unrecognized for a whole bunch of coin offerings.
Steinberg executed this criminal camouflage strategy for several years, which allowed the self-proclaimed expert to continuously find new victims for his fraud. His activities recently got discovered when the KaratCoin price heavily dropped out of a sudden. The unexpected volatility caught many investors and traders off guard, as there had been numerous marketplaces, start-ups and blockchain business models in the past that did not live up to promises regarding security or price stability aspects. Also, there’s enough empiric evidence of founders who used their business models to scam users and to eventually shut down. This uncertainty still causes much hesitation amongst investors when it comes to blockchain and digital currencies.
Marvin Steinberg: Former Partners Lost at Least 20 Million Euros
In the case that has now come to light, however, no false promises caused the price drop. In fact, no less than Marvin Steinberg himself is the one that needs to be looked at as the source. In beginning of July, the Karatbars managing board realized that Steinberg had secretly been hiding a huge wallet with 400 million coins, and that he over the course of months had been illegally selling them via online marketplaces. He even travelled to South Africa, where – to quote the public version – he participated in a ‘survival and motivation course’. In reality, prior to his journey he had transferred around 180 million KBC from the secret wallet to a supposed client who by coincidence was located at the same place in which the alleged coaching supposedly took place. This ‘client’ sold the stolen coins for him, which at that time had an estimated net value of around 9 million Euros. Based on the information that are available now, one must assume that Steinberg’s contact in Africa is part of a criminal network that assists the German in turning the stolen goods into money.
It didn’t take responsible executives long to discover their losses, and to recruit a lawyer for theft prosecution. At that time, Marvin Steinberg still assured his allegedly honest interest to achieve a mutual agreement and expressed his best intentions. But instead of providing clarification through transparency, he claimed that he had simply forgotten about the enormous amount of coins. Steinberg then refused to hand over the wallet to its respective owners and sold 230 million of the stolen coins within the following two and a half months. This resulted in an overall loss of 20 million Euros just for this one company. The consequence: a significant drop in the KaratCoin exchange rate, as well as a company in a dire situation.
Russian Agency Uses Fake News as a Weapon Against Former Business Partners
But instead of minimizing the damages he caused, Marvin Steinberg went even one step further: He now, in the sense of classic witness discrediting tactics, proactively tries to make the companies he worked with seem untrustworthy in the public eye. His former clients are settled within the still-very-young blockchain industry, which is a difficult one to grasp for outsiders. As a result, it is a convenient approach to make untrue allegations online and to let the ones that are affected appear dubious from a third-party point of view.
In order to achieve his goal, Marvin Steinberg initiated an online smear campaign covered up as a clarification mission, for which he hired a Russian agency that – in the name of an (unnamed) ‘independent research group’ – spreads fake news online. He buys Google adword campaigns, which offer users searching for Karatbars a downloadable ‘investigative report’. The report contains numerous allegations directed at his former clients. The website of the so-called ‘research group’ is densely packed with spelling mistakes and does not contain any information about its creators. Steinberg, however, does not hesitate to display and discredit the names and pictures of his former business partners on that very website.
In addition to those efforts, he spends money to buy articles on other websites in order to back up the alleged revelations. Ironically, these websites which are supposed to validate the accusations are all registered on the Marshall Islands or comparable law loopholes. It is common knowledge that those countries are the most popular and beloved solution for website owners who want to defy an explanation regarding their online activities. A coincidence?
Marvin Steinberg: Criminal Network Might be Bigger than Expected
Up until now, the profits that Marvin Steinberg generated from his crimes remain hidden. Also, time will tell how much his official agency partners have benefited from the fraud system. As of now, they are still presented as staff members on the MyICO website: Luca Kögel, Erik Reifer, Eugen Rosenmeier, Jeremy Prasetyo and the Frankfurt-based lawyer Harald Plewka are all listed on their own websites as well as the social business networks Xing and LinkedIn. However, current research results as well as the overall the extent of the fraud suggest that Marvin Steinberg’s criminal network reaches much further. Several EU-wide criminal proceedings have been conducted and prosecution is looking for witnesses. Steinberg himself seems to be aware of those developments: Throughout the last months, he has been unavailable and impossible to reach for prosecutors and business partners alike.
In the meantime, the defamation campaign against the victims, orchestrated from abroad, continues. Not only is he parting thousands of private investors from their savings, but also damaging the companies whose trust he had previously obtained by false pretenses. It seems to be a matter of time until journalists and law enforcement officials will dig up further news in the case.
For the crypto community, the recent events ultimately mean that they will once again have to deal with a breach of confidence caused by a person that was previously known as an expert, and who has now run away with investors cash.