Fool’s Gold: Unveiling the Cryptocurrency Mirage

Disgraced NRL star Jarryd Hayne has allegedly recently fallen victim to a significant fraud scheme involving bitcoin investments where he was defrauded by fellow inmate Ishan Sappideen, while serving time in Cooma Jail.

The Daily Mail reported that Hayne recently lost $780,000 to con artist Ishan Sappideen, with this incident highlighting the dangers of investment fraud and emphasising the importance of being vigilant while engaging in any types of financial transactions, particularly in the world of cryptocurrency.

Mr Sappideen operated a scheme which promised high returns on bitcoin investments, all done whilst being incarcerated in Cooma Jail. This elaborate scam lured unsuspecting victims with the promise of substantial profits at little to no risk.

Hayne along with numerous other inmates, fell victim to Sappideen’s scheme resulting in significant financial loses. Mr Sappideen capitalized on the lack of regulation in the cryptocurrency space using this, along with his innate ability to sell his skills, to orchestrate this scam, entangling even well-known figures such as Hayne.

What is a bitcoin investment?

Bitcoin investment refers to the practice of buying, holding, or trading bitcoin, the most well-known and widely used cryptocurrency. Bitcoin operates on a decentralized network called blockchain and offers potential investors the opportunity to profit from price fluctuations. It is important to note that investing in bitcoin, like any other investment, carries both potential rewards and risks.

What should I do if I think I have been defrauded?

If you suspect that you have fallen victim to fraud, it is crucial to take immediate action. Here are some steps you should consider:

  1. Gather evidence: Collect all relevant documents, emails, receipts, or any other form of communication related to the fraudulent transaction. This evidence will be valuable when reporting the incident.
  2. Contact your financial institution: Notify your bank or credit card company about the fraudulent activity. They can guide you through the necessary steps to protect your account and initiate an investigation.
  3. Report the fraud: Contact your local law enforcement agency and provide them with all the relevant information, including the evidence you have gathered. Reporting the incident will help authorities track down the fraudsters and potentially recover your money.
  4. Notify relevant authorities: Inform regulatory bodies, such as the Australian Securities and Investments Commission (ASIC), about the fraud. They can provide guidance and support in dealing with investment-related scams.
  5. Obtain legal advice from a legal firm which specialise in fraud cases.

How to get crypto back from a scammer?

Recovering stolen cryptocurrency can be a challenging process due to the anonymous nature of digital currencies. However, it’s crucial to act swiftly and take the following steps:

  1. Notify the cryptocurrency exchange: If the scam involved a specific cryptocurrency exchange, promptly notify their support team about the incident. They may be able to assist you further, freeze the scammer’s account, or take preventive measures to safeguard other users.
  2. Seek legal advice: Consult with a lawyer who specialises in cryptocurrency and financial fraud. They can guide you through legal processes and explore potential avenues for recovery.
  3. Report the scam: Contact your local law enforcement agency and provide them with a detailed account of the scam, along with the evidence you have collected. While the chances of directly recovering your funds may be limited, reporting the incident helps raise awareness and assists authorities in their efforts to combat scams.

Cryptocurrency scam – what should I do if I have been scammed?

If you have fallen victim to a cryptocurrency scam, it’s essential to take immediate action to minimise further damage. Follow these steps:

  1. Cease communication: Cut off all communication with the scammer to prevent further manipulation or potential losses. Do not engage in any further transactions or share any personal or financial information.
  2. Secure your accounts: Change passwords and enable two-factor authentication on all your cryptocurrency wallets, exchanges, and related accounts. Consider using a password manager for enhanced security.
  3. Report the scam: File a complaint with your local law enforcement agency, providing them with all available evidence. Be prepared to provide detailed information about the scam, the perpetrator, and any financial transactions involved.
  4. Inform your bank or credit card company: If you made any transactions related to the scam using traditional payment methods, notify your bank or credit card company immediately. They may be able to assist you in disputing the charges or blocking further transactions.

What is a Ponzi scheme?

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from new capital contributed by subsequent investors, rather than from actual profit earned through legitimate investments. The scheme relies on attracting new investors to sustain the illusion of profitability. Ponzi schemes eventually collapse when it becomes unsustainable to pay returns to all investors.

The name Ponzi is derived from Charles Ponzi who in the 1920’s in the US ran a scheme where he would pay off early investors in these investment companies with the proceeds of later investors. This led to him defrauding some US $20 million, which in the 1920’s was a significant amount of money. Like all Ponzi schemes, it erupted, leaving his investors with nothing to show for their investments.

Key characteristics of a Ponzi scheme include:

  1. Promise of high returns: Ponzi schemes often promise unusually high and consistent returns, far exceeding what legitimate investments can offer.
  2. Lack of transparency: Operators of Ponzi schemes tend to be secretive about the investment strategy or provide vague and confusing explanations. They may use complex jargon to create an illusion of expertise.
  3. Emphasis on recruitment: Ponzi schemes heavily rely on recruiting new investors to generate funds for payouts to existing investors


The unfortunate incident involving Hayne’s financial loss to con artist Ishan Sappideen highlights the risks associated with bitcoin investment fraud. It serves as a reminder for individuals to exercise caution and due diligence when engaging in financial transactions, particularly in the cryptocurrency space. By being vigilant, seeking assistance from relevant authorities, and taking immediate action, victims of fraud may increase their chances of recovering lost funds and bringing fraudsters to justice.

Salerno Law has a team of dedicated and experienced lawyers in this area of legal practice who have an unparalleled commitment to achieving the best possible outcomes for our clients. This dedication and experience mean we are able to provide tailored advice and successful results for our clients who may have fallen victim to fraudulent behaviour, particularly in the realm of Bitcoin.

Salerno Law was voted the Number 1 Cryptocurrency law firm in 2022 and commenced the first cryptocurrency class action in Australia. This class action related to the crypto token known as ‘Qoin’.

Our reputation for excellence and results makes us a trusted and reliable choice for anyone seeking legal representation in an investment fraud case.

Author: Ibbi Jahshan