Brazil Federal Police Arrest Bitcoin Banco Group President
Brazil law enforcement agencies have busted a cryptocurrency crime syndicate accused of defrauding citizens of a combined 7,000 bitcoins (worth about $305M).
Bitcoin Banco Group Is a Scam
Investigating the cryptocurrency crime syndicate called the Bitcoin Banco Group led by Claudio Oliveira has been ongoing for three years. Claudio was known as the bitcoin king, and its crypto investment firm was known to promise obscene gains for those who invested in the scheme two years ago. But by the end of that year, the firm couldn’t account for the loss of 7,000 BTC. Thus, it filed for a judicial recovery order to pay investors and prevent bankruptcy.
The judicial recovery order is a government-approved arrangement where a firm restructures its finances and administration to avoid bankruptcy and pay its investors. Sadly, the Bitcoin Banco Group went on with its services without explaining how the bitcoins disappeared suddenly. Rather, it updated the terms and conditions of its website and notified its clients that their funds are not lost.
Institution of Operation Daemon
A legal rep for the aggrieved clients revealed irregularities in the audited data and the amount disclosed by the firm. The company also refused to provide screenshots of its wallet data to prove that the bitcoins were still there.
At this time, the federal police created a 90-man task force (called operation daemon) to make a detailed inquiry about the issue. The 90-man team of investigators later discovered that customers’ funds were being diverted illegally from the group’s account to Oliveira’s accounts.
During his arrest, law enforcement agents also seized other items from him. Items seized include cryptocurrency hard wallets, several wads of cash, and posh vehicles. The Brazil federal police have charged the Bitcoin Banco Group and its president, Oliveira, with fraud and money laundering.
Intelligence communication between foreign law enforcement agencies and the Brazil federal police proved that Oliveira ran away from the U.S. and Europe after being wanted for similar crimes. Thousands of ‘investors’ lost their cash and other assets to the Oliveira-led bitcoin investment scam.
Brazil Bitcoin Exchange-Traded Fund (ETF)
It has to be noted that Brazil authorities aren’t averse to cryptocurrencies. You’d recall that the samba nation was the first Latin American country to launch a bitcoin ETF. As of March 2021, when it was launched, it was the second country after Canada across the world to launch a bitcoin ETF.
Canada had launched three bitcoin ETFs before Brazil’s first bitcoin ETF. ETFs are certain securities with specific or varying assets and track the market prices of such assets.
Here, the asset is bitcoin. Conventional exchanges allow ETF transactions, and investors can be exposed to an ETF’s asset without being exposed to the asset’s risks directly. The U.S. doesn’t have a crypto-asset ETF yet. The U.S. SEC revealed that none of the crypto-related ETF proposals that it has received could prove beyond doubt that the asset (whether bitcoin or Ethereum) isn’t prone to any manipulation.
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