Crypto Withdrawal Gas Fee Scam: The $1.16 Million Fraud Behind Fake Trading Profits

Published by Cyb3rsect | October 24, 2026

Your cryptocurrency investment account shows a substantial profit. The trader tells you that your money is ready for withdrawal.

There is just one problem.

Before receiving the funds, you must pay an additional charge described as a gas fee.

You make the payment, expecting the withdrawal to be processed. But instead of receiving your money, you are told that another payment is necessary.

This situation is familiar to many victims of fraudulent cryptocurrency investment operations.

A recent federal criminal case demonstrates how the tactic works.

On October 19, 2026, Elmin Redzepagic, a 25-year-old Connecticut resident, pleaded guilty to federal offenses arising from a cryptocurrency investment fraud scheme.

According to the U.S. Department of Justice (DOJ), Redzepagic persuaded victims that he was an experienced cryptocurrency investor capable of generating high returns.

After receiving their money, he claimed that their investments had produced substantial profits. However, victims were told they needed to pay additional gas fees before withdrawing their earnings.

Federal prosecutors revealed that the money had not been invested in cryptocurrency as promised.

Instead, Redzepagic transferred victims’ funds to an offshore gambling platform, where he lost substantial amounts.

The DOJ reported net losses totaling $1,159,945.34 across more than ten victims.

This case provides an important warning about fake cryptocurrency profits, misleading withdrawal fees, and the difference between legitimate blockchain transaction costs and payments demanded by fraudulent investment operators.

Why Crypto Scammers Demand Gas Fees Before Withdrawals

Gas fees are genuine transaction costs on certain blockchain networks.

For example, Ethereum users typically pay network fees when sending transactions or interacting with smart contracts.

These charges compensate network validators for processing transactions.

However, scammers exploit the term because many cryptocurrency investors know that blockchain transfers can involve transaction fees.

A fraudulent investment operator may tell a victim that their funds cannot be released until a gas fee has been paid.

The demand may sound technical and legitimate.

But there is an important distinction.

A genuine blockchain network fee is not the same as an arbitrary payment demanded by someone controlling an investment account.

Actual network fees are associated with transactions on a particular blockchain.

Their amounts depend on the network, transaction type, and current conditions.

A platform demanding a large separate payment to release supposedly accumulated profits should be examined carefully.

The Elmin Redzepagic Cryptocurrency Fraud Case

According to the DOJ, Redzepagic operated his scheme between approximately May 2021 and March 2025.

He presented himself as a cryptocurrency investor capable of earning substantial returns.

Victims transferred money believing it would be used for cryptocurrency investments.

After receiving their deposits, Redzepagic allegedly represented that their investments had generated significant profits.

He then demanded additional gas-fee payments before withdrawals could occur.

The supposed profits were central to the deception.

A victim who believes their original investment has multiplied may be willing to send additional money to access it.

For example, someone who believes they have earned $80,000 may view a $2,000 withdrawal charge as a relatively small obstacle.

But if the reported profit is fictitious, the additional payment simply increases the loss.

In this case, federal prosecutors established that the money was not invested as promised.

Who Was “The Chef” in the Cryptocurrency Scheme?

One unusual detail in the federal case was a person referred to as “The Chef.”

According to court documents described by the DOJ, Redzepagic claimed to be part of a team led by someone using that name.

He represented that The Chef determined which investors would receive profits, how much they would receive, and when payments would occur.

This claim gave the operation an apparent hierarchy.

Rather than appearing to make every decision personally, Redzepagic could attribute withdrawal restrictions to a supposed senior figure.

That distinction matters because fraudulent investment operations sometimes invent administrators, compliance departments, trading managers, or payment officers.

These characters can create the impression of a legitimate organization.

They may also provide explanations for delays.

For an investigator, the existence of a claimed team should not be accepted without supporting evidence.

Communications referring to supervisors or administrators should be preserved, but their identities and roles must be independently established.

Where Did the Victims’ Cryptocurrency Go?

The DOJ reported that Redzepagic transferred funds to Stake.com, an offshore gambling platform.

According to prosecutors, he used the platform to receive and hold proceeds of the fraud.

He also used it to generate cryptocurrency addresses for victims to send Bitcoin.

Rather than investing the money through the promised cryptocurrency strategy, he gambled with victims’ funds.

Federal authorities reported that this conduct caused approximately $1.16 million in net losses.

The use of a gambling platform is an important feature of the case.

An investor may believe a receiving Bitcoin address belongs to an investment fund or trading account.

But the address could instead be associated with an unrelated financial service.

The destination of a cryptocurrency transfer can therefore reveal important discrepancies between what the investor was told and what actually occurred.

The DOJ’s findings concern Redzepagic’s misuse of the service; they do not establish that Stake.com itself participated in his fraud.

How Fake Gas Fees Become a Second Stage of Fraud

Many cryptocurrency scams involve more than one financial loss.

The initial loss occurs when a victim deposits money into an investment operation that does not use the funds as promised.

The second loss may occur when the operator demands additional payments to release supposed profits.

This second stage can be particularly effective because the victim is already financially committed.

The person may believe that refusing to pay the fee means abandoning a large investment balance.

The scammer may use that fear to encourage another payment.

The process can continue through different explanations:

• A gas fee must be paid to process the transaction.
• A tax payment is required before the withdrawal.
• An account verification charge is outstanding.
• The wallet must be activated.
• A security deposit is required to release the funds.

These descriptions do not establish that the requested charges are genuine.

The essential question is whether there is an actual, verifiable financial or blockchain transaction behind the demand.

Real Blockchain Gas Fees vs. Fake Withdrawal Charges

Understanding the technical difference can help investors recognize suspicious requests.

Genuine blockchain fee	Suspicious withdrawal demand
Associated with an actual network transaction	Described as a condition for unlocking profits
Calculated according to network rules	Amount set by an individual or platform
Paid as part of transaction execution	May require a separate transfer to another address
Transaction can usually be checked on a block explorer	No verifiable transaction may exist
Does not guarantee investment profitability	Often accompanied by claims of guaranteed withdrawal

This comparison is general guidance, not an absolute test.

Some legitimate custodial services charge withdrawal fees, and those fees may differ from direct blockchain network costs.

However, an unexplained advance payment demanded by an investment operator is a significant warning sign, especially when the platform refuses to deduct the charge from an available balance.

Why a Profitable Account Balance May Be Worthless

Fraudulent investment operators can manipulate the financial information shown to victims.

A person may receive statements claiming that a cryptocurrency investment has generated substantial returns.

But those statements may not correspond to actual trading activity.

In Redzepagic’s case, the DOJ reported that he told investors they had earned substantial profits despite not investing their funds as promised.

This demonstrates why investors should distinguish between reported account values and independently verifiable assets.

A genuine investment account should have records that can support its holdings and transactions.

For cryptocurrency, those records may include exchange statements, wallet balances, blockchain transactions, and custody arrangements.

An unsupported profit figure is not proof that money exists.

What Are “Lulling Payments” in Investment Fraud?

Federal prosecutors also reported that Redzepagic made large payments to victims during the operation.

These were described as lulling payments.

A lulling payment is money provided to reassure a victim, maintain confidence, or discourage suspicion.

The payment may be represented as an investment return.

A victim who receives money may believe that the operation is legitimate and continue investing.

They may also encourage other people to participate.

However, the existence of payments does not establish that a legitimate investment strategy generated them.

In this case, prosecutors described payments made in connection with an operation that diverted victims’ funds to gambling rather than the promised investments.

When reconstructing an investor’s financial position, all actual payments received should be recorded separately from profits merely displayed or promised.

How Investigators Trace Bitcoin Sent to Fraudulent Traders

Bitcoin transactions are recorded on a public blockchain.

Where a victim retains the transaction identifier, investigators may be able to examine the receiving address and subsequent movement of funds.

A blockchain review can help establish when a transfer occurred, how much Bitcoin was sent, and which addresses received it.

Sometimes transaction patterns suggest interactions with identifiable exchanges or services.

However, a Bitcoin address does not automatically disclose the identity of its controller.

Funds may move through custodial platforms or multiple addresses.

The Redzepagic case demonstrates why off-chain evidence is also important.

The DOJ’s account identifies a gambling platform as part of the financial operation.

Understanding that connection required more than simply observing a Bitcoin transaction.

Investigators may need exchange records, service-provider information, payment instructions, communications, and legally obtained financial records.

For related technical guidance, readers can consult Cyb3rsect’s Blockchain Transaction Tracing article.

What to Do If Someone Demands Gas Fees to Release Your Crypto

If an investment operator says that additional fees are required before you can withdraw your money, avoid making an immediate payment.

First, establish what the fee supposedly represents.

Ask for the blockchain network, transaction details, fee calculation, and explanation of who receives the payment.

Verify whether the claimed transaction exists independently of the investment platform.

If the person refuses to provide meaningful information, repeatedly changes the amount, or introduces new charges after previous payments, those are serious warning signs.

Preserve the messages and payment instructions.

Do not provide wallet seed phrases, private keys, or remote access to your device.

If cryptocurrency has already been transferred, retain the transaction hashes and contact the exchange or service used to send the funds.

Reporting the transaction promptly may help preserve relevant records, although recovery cannot be guaranteed.

How to Preserve Evidence of a Gas Fee Scam

Digital evidence is especially important when a fraudulent investment relationship develops through messaging applications.

Relevant records may include the initial investment proposal, promised returns, account screenshots, and instructions for sending cryptocurrency.

Messages demanding gas fees should be preserved in their original form.

Keep records of each payment, including the date, amount, asset, network, and receiving address.

If the operator claims to work with a team, preserve the names and contact details provided.

A chronological record can help establish the relationship between the original investment, the reported profits, the withdrawal request, and the subsequent payment demands.

For a broader guide, see Cyb3rsect’s Digital Evidence Preservation publication.

The Criminal Charges and Guilty Plea

On October 19, 2026, Redzepagic pleaded guilty before U.S. District Judge Kari A. Dooley in Bridgeport, Connecticut.

According to the DOJ, he pleaded guilty to:

• Two counts of wire fraud.
• One count of international money laundering.
• One count of making a false statement to IRS Criminal Investigation agents.

Federal prosecutors reported that he made several false statements during an interview with IRS investigators in September 2023.

He was arrested on February 12, 2026.

As of the DOJ’s October 19 announcement, he was released on a $500,000 bond pending sentencing.

The court scheduled sentencing for January 11, 2027.

Each wire fraud count carries a statutory maximum of 20 years’ imprisonment, and the international money laundering count also carries a maximum of 20 years.

The false-statement count carries a maximum of five years.

These are statutory maximum penalties, not a prediction of the sentence that will be imposed.

Can Victims Recover Money From a Crypto Gas Fee Scam?

Recovery depends on the circumstances of the individual case.

Relevant factors include the payment method, the destination of the funds, the availability of assets, and the status of criminal or civil proceedings.

The Redzepagic case has reached the guilty-plea stage, but sentencing was still pending as of October 24, 2026.

The DOJ’s announcement does not establish that a victim compensation fund has been created or that all losses have been recovered.

Victims should preserve their transaction records and monitor official court information.

People affected by similar cryptocurrency fraud may report the incident to the FBI’s Internet Crime Complaint Center at https://www.ic3.gov/.

Where losses are substantial, legal advice may help clarify available remedies and reporting requirements.

No private investigator or recovery company can guarantee that cryptocurrency will be returned.

Beware of Recovery Scammers Who Demand Another Gas Fee

Victims who have already paid fraudulent withdrawal fees may later be approached by supposed recovery agents.

The person may claim to have located the missing cryptocurrency.

They may present a wallet balance or blockchain screenshot and insist that a final gas fee is necessary to release the funds.

This can reproduce the same deception that caused the original loss.

A screenshot showing cryptocurrency in a wallet does not prove that the recovery agent controls the assets or has authority to transfer them.

Do not pay an unsolicited recovery agent based solely on a claim that money has been found.

Verify any claimed court, regulatory, or law-enforcement involvement through official sources.

For additional context, Cyb3rsect’s Crypto Recovery Scam Investigation guide examines how secondary fraud targets people who have already lost money.

How Cyb3rsect Approaches Crypto Withdrawal Fraud

The Redzepagic case highlights the importance of examining what happens after an investor requests a withdrawal.

The original investment pitch may be misleading, but the payment demands that follow can provide additional evidence of fraud.

At Cyb3rsect, our research focuses on suspicious cryptocurrency investment operations, blockchain transaction analysis, digital evidence preservation, and online financial fraud.

An evidence-based investigation examines the representations made to investors, the actual transfer records, and the financial services involved.

The objective is to identify verifiable facts and practical next steps without promising guaranteed recovery.

Why This Case Matters Beyond One Individual

The Redzepagic prosecution illustrates several recurring features of cryptocurrency investment fraud.

Victims were told that an experienced trader could generate high returns.

They were then informed that substantial profits existed but could not be withdrawn without additional payments.

A supposed senior figure was used to explain who controlled distributions.

And the money was diverted to a destination unrelated to the promised investment activity.

These elements can appear in many different forms of online investment fraud.

The names, websites, and payment platforms may change.

The underlying deception remains similar: an investor is shown a financial benefit that does not exist and then pressured to pay more money to access it.

Final Assessment: The Truth Behind Fake Crypto Withdrawal Gas Fees

The October 2026 guilty plea of Elmin Redzepagic provides a documented example of cryptocurrency investment fraud involving fictitious profits and withdrawal-related gas-fee demands.

Federal prosecutors reported that he diverted investors’ funds to an offshore gambling platform instead of investing them as promised.

The resulting net losses exceeded $1.15 million.

The case demonstrates that technical blockchain terminology can be used to disguise a straightforward financial deception.

A legitimate network fee does not establish that a claimed investment profit exists.

For anyone facing unexplained withdrawal charges, the safest approach is to stop additional payments, preserve the evidence, verify the underlying transactions, and report suspected fraud through appropriate channels.

The most important question is not how much a cryptocurrency platform says you have earned. It is whether the money actually exists, who controls it, and why another payment is supposedly required to release it.