The Federal Police of Brazil introduced on Monday that they had arrested Cláudio Oliveira for his alleged involvement in a $300 million fraud scheme. Oliveira—the self-proclaimed “Bitcoin King”—is president of the Brazilian Bitcoin brokerage agency Bitcoin Banco Group, and he’s accused of staging a cryptocurrency theft to embezzle cash.
Oliveira reported a bitcoin hack on his firm in 2019, however Brazilian authorities imagine the crime was a ruse. Oliveira’s firm reported 7,000 bitcoin had been stolen and shopper withdrawals from the group’s brokers ceased.
An investigation into the reported crime ensued, however whereas authorities seemed into the crime, Bitcoin Banco Group acquired a positive determination in its request for judicial restoration from the first Chapter Courtroom of Curitiba, based on a Monday press launch from the Federal Police in Brazil. (A judicial restoration is a kind of exemption that enables a company entity to pay collectors with out submitting for chapter.)
The alleged theft is now being known as a fraud by police, and authorities are saying Bitcoin Banco Group embezzled R$1.5 billion ($300 million U.S.) from buyers. Greater than 7,000 buyers have reportedly been affected by the alleged Ponzi scheme, police stated.
Even after Bitcoin Banco Group acquired restoration funds, the corporate reportedly by no means defined the explanation behind the supposed disappearance of the cryptocurrency to its purchasers. Whereas the Bitcoin Banco nonetheless knowledgeable purchasers their Bitcoin was not taken, a lawyer engaged on behalf of Bitcoin Banco purchasers acknowledged there have been inconsistencies between the quantities expressed by the corporate and audited information.
Federal Police started a three-year investigation into the corporate’s actions throughout this time known as Operation Daemon. The investigation concerned round 90 federal law enforcement officials in Curitiba and the Metropolitan Area.
Operation Daemon discovered that the Bitcoin Financial institution was working a non-public blockchain. When prospects deposited funds, a system allegedly confirmed prospects pretend data that they had been making good points. Nonetheless, investigators discovered inconsistencies with the transactions.
Federal Police later discovered there weren’t sufficient funds within the cryptocurrency accounts managed by the Bitcoin Financial institution to pay all its collectors. Operation Daemon additionally reportedly discovered that funds from Bitcoin Banco Group’s purchasers had been irregularly diverted to the private accounts of Oliveira.
Oliveira is now going through expenses of embezzlement, cash laundering, legal group, and crimes towards the nationwide monetary system. When he was arrested, police additionally seized eight luxurious vehicles and jewels. Oliveira’s alleged scheme just isn’t the primary time he is run afoul of the legislation. Brazilian investigators reported he has allegedly dedicated crimes of the identical nature in the USA and Switzerland.
