Brazilian federal police hit another fraudulent system from the cryptocurrency market. This allegedly raised at least Brazilian Reals 1.5 billion (about $ 300 million) from more than 7,000 casualties.
Brazil’s federal police strike another scam
After nearly three years of investigation, authorities were able to gather enough evidence to arrest Cláudio Oliveira, better known as the “King of Bitcoin.” Oliveira was president of the Bitcoin Banco Group, a popular financial company that made a name for itself during the cryptocurrency boom, promising extraordinary profits to those who trusted her.
However, at the end of 2019, the Bitcoin Banco Group reported that around 7,000 bitcoins had disappeared from their wallets. It then applied for the so-called judicial recovery order – a special arrangement agreed by the Brazilian authorities in which the company reorganizes its finances and administration to pay off its creditors and avoid bankruptcy.
Interestingly, at the time, the company continued to provide its usual services without explaining the reasons behind the disappearance of cryptocurrencies. Instead, it unveiled an updated version of its platform, reassuring customers that digital currencies are available on it. However, according to a lawyer acting on behalf of Bitcoin Banco clients, there were inconsistencies between the amounts expressed by the company and the data shown by the auditor. The company also failed to provide wallet data that could explain the issue.
The investigation starts
Meanwhile, the Brazilian federal police set up a special task force of as many as 90 officers. Their task was to investigate the Grupo Bitcoin Banco case as closely as possible. Investigators concluded that clients’ funds were irregularly redirected to Oliveira’s personal accounts.
In addition to the project lead’s arrest, federal police confiscated several other assets belonging to him, including luxury cars, large amounts of cash, and cryptocurrency hardware wallets.
Police have already filed lawsuits against Bitcoin Banco and Oliveir for money laundering, fraud and other such allegations.
Intelligence sharing between federal police and foreign agencies confirmed that the Oliveira case had previously been under investigation in the United States and Europe. All in connection with similar financial crimes.