One of the mantras that you need to follow when investing in any cryptocurrency project is that “If it sounds too good to be true, it probably is”. Reports indicate that more than 55,000 investors in Brazil were scammed more than $200 million by a cryptocurrency crime cartel based in the country.
Brazilian Cryptocurrency Crime Cartel Get Away with $200 Million
Over the last couple of years, the number of cryptocurrency scams has increased tremendously. One such scam that is still active is the Bitcoin Revolution. The Brazilian cryptocurrency cartel used a similar strategy to the one used by Bitcoin Revolution to lure in unsuspecting investors who wanted to make quick money from the crypto industry.
Reports indicate that the cartel managed to successful get authorization from Central Bank of Brazil to run a financial institution but they did not the required credentials. The scammers claimed to be offering crypto investments that were capable of generating up to 15% ROI.
The Federal Revenue Service that was tasked with investigating this case has since revealed that the illegal financial institution had managed to raise more than $210 million from investors by February this year. In fact, the authorities believe that the number could be close to $250 million though.
Following a few complaints from the investors, the Federal Revenue Agency and Brazilian Federal Police carried out a joint investigation that led to the dismantling of the cartel system. The joint investigation dubbed, Operation Egypto, executed 10 arrest warrants and twenty-five search and seizure orders in 8 cities in Brazil including Novo Hamburgo, the cartel base.
While speaking to the press, the Brazil’s Finance Crimes Eduardo Dalmolin Boliis and the Federal Police Office of Corruption stated that investing in cryptocurrencies such as Bitcoin is not illegal. Anyone who is interested in the technology and digital assets is free to invest. The only problem with the cartel’s financial institution is that it was not permitted to offer crypto investment services.
During Operation Egypto, the investigators stumbled upon a group of scammers who instead of investing in cryptocurrency, they were placing it in a number of low-yield and fixed rate investments. This particular group was spending the cryptocurrency on luxury items such as cars and investing in real estate.
The authorities swiftly seized all the financial assets accrued by the group as well as a dozen of real estate properties and 36 luxury vehicles. An undisclosed amount of money was also seized from the group headquarters during the seizures.
The Brazilian cryptocurrency cartel is also being investigated for among many other crimes, financial misappropriation, fraudulent management of assets, running a criminal organization, and money laundering.
This is not the first cryptocurrency related crime to happen in Brazil. Last year, the Brazilian crime team arrested a man on suspicion of establishing and managing a drug trafficking cartel that relied on cryptocurrency. The man was also accused of using bitcoin to launder money. During the raid, bitcoin mining equipment worth $63,000 was seized from his apartment. Get more trending cryptocurrency news here.