Brazil: Law Forces Nab Criminals for Orchestrating $248 Million Cryptocurrency Scam


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Law forces in Brazil have clamped down on a cryptocurrency crime cartel accused of duping more than 55 thousand investors of more than approximately $248 million, The Next Web reports, May 22, 2019.

Crypto Criminals Nabbed

The ease of committing crimes in the crypto industry has worried regulators with several taking extreme measures in the form of putting a complete blanket ban on cryptocurrencies.

Brazilian local media outlet Correiro Do Povo reported on May 21 that the country’s police had arrested ten people concerning a cryptocurrency pyramid scheme that is said to have conned investors to the tune of about $248 million.

According to the government agencies, the country’s police force in partnership with the Federal Revenue Agency untangled the web of the fraudulent crypto business used to entice people by promising them yearly returns of more than 15 percent on their investments.

The Federal Revenue Agency noted that the group of perpetrators was able to raise as much as $210 million by February 2019 from the unsuspecting investors. However, the authority also believes that the actual figure could be even higher – hovering somewhere around $248 million.

The crackdown on the crime cartel was part of Brazil’s Operation Egypto initiative which seeks to identify and dismantle illegal financial schemes in the country. During the operation, the agencies arrested ten persons and seized 25 places across eight cities in Brazil. The nerve center of the criminal organization was said to be in the town of Novo Hamburgo.

Although investing and trading in cryptocurrencies is not illegal in Brazil, conducting business without proper authorizations is, said Eduardo Dalmolin Boliis from The Federal Police’s Office of Corruption and Financial Crimes.

After making the arrests and raiding the company’s unauthorized bases, the investigating authorities found that the firm was not making any investment in cryptocurrencies at all. Instead, it was investing customers’ funds in low-yield and fixed rate financial instruments and lavishly spending them on fancy items like luxury cars, real estate, and jewelry. The authorities have seized the company’s financial assets, real estate property, a total of 36 luxury cars, and an undisclosed sum of money.

Crypto Crimes Giving the Industry a Bad Name

Recently, the U.S. Securities and Exchange Commission (SEC) again delayed making a final decision on VanEck’s Bitcoin ETF proposal. Although the continual delay might frustrate the crypto community, it’s worth mentioning that one of the significant barriers stopping a Bitcoin ETF is the high level of crime in the infant space.

As reported by BTCManager on May 22, 2019, the SEC shuttered a crypto Ponzi scheme that lured investors into investing in a so-called diamond-backed cryptocurrency.

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