Brazil Police Arrest ‘Bitcoin King’ for $300 Million Fraud
The Brazilian Federal Police have arrested several members and the leader of Bitcoin Banco Group, a company that embezzled investors’ funds in the name of cryptocurrency investment.
The official press release on Monday detailed that the
action against the allegedly fraudulent company by law enforcement was taken
after a three-year-long investigation. It has also led to the arrest of Cláudio
Oliveira, better known as ‘The Bitcoin King’, who was the President of Bitcoin
Banco Group.
The company is believed to have scammed more than 7,000 investors
out of at least 1.5 billion Brazilian reais (about $300 million).
Bitcoin Banco Group gained popularity during the
cryptocurrency boom and managed to gather funds from thousands of investors by
promising massive gains on investments. However, by the end of 2019, the
company said the 7,000 Bitcoins under its custody had disappeared and thus
ceased client withdrawals.
Instead of going into bankruptcy, the company applied for a
judicial recovery order that enabled it to reorganize its finances and administration
to pay creditors. Despite the troubles, the controversial company continued to
offer services but did not explain the sudden disappearance of its funds.
Law enforcement thinks that the fraudulent activities of the
company started in 2019 based on the numerous complaints filed by possible
victims.
In the so-called ‘Operation Daemon’, around 90 federal police
officers are involved in investigating Bitcoin Banco Group’s bankruptcy crimes,
embezzlement, money laundering and criminal organization structure. Along with
the arrests, the authorities searched and seized properties.
Furthermore, the Brazilian police detailed that multiple
foreign agencies, including the ones in the United States and Europe,
investigated Oliveira for similar crimes.
Meanwhile, one of the largest Bitcoin frauds took place in
South Africa that embezzled investors of $3.6 billion in cryptocurrencies. The
masterminds of the scam disappeared with all the investors’ funds.
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