The Brazilian Federal Police have busted a cryptocurrency scam that allegedly defrauded over 7,000 people out of at least 1.5 billion Brazilian reais (about $300 million).
Authorities were able to compile enough evidence to arrest Cláudio Oliveira, also known as “The Bitcoin King,” after a nearly three-year investigation. Oliveira was the head of the Bitcoin Banco Group, a well-known finance firm that rose to prominence during the bitcoin bubble by promising exorbitant returns to individuals who entrusted it with their money.
Bitcoin Banco Group reported the disappearance of 7,000 Bitcoins at the end of 2019 and applied for a judicial recovery order, which is a special agreement reached with Brazilian authorities in which the company reorganizes its finances and administration to pay creditors and avoid bankruptcy.
The Federal Police put up a task group of 90 officers to examine the Grupo Bitcoin Banco while all of this was going on. According to “Operation Daemon,” monies from the group’s clients were improperly moved to Oliveira’s accounts.
Oliveira’s assets were confiscated by the Federal Police in addition to his detention, including expensive cars, substantial sums of money, and bitcoin hard wallets.
The Group Bitcoin Banco and Oliveira have been charged with money laundering, fraud, and other offenses.
Oliveira had already been under investigation in the United States and Europe for similar offenses, according to intelligence exchanges between the Federal Police and foreign agencies.
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