A Brazilian cryptocurrency firm has been closed down due to frauding 55,000 traders worth $200m.
According to the local news reports, Correio Do Povo. The fraudsters hoaxed the traders by demanding to offer 15 percent returns on digital assets they will invest in the firm. The cryptocurrency fraudsters operated the financial institution illegally because Brazil’s central bank had not officially permitted it to conduct its business.
By February 2019, The Federal Revenue Service affirmed that the fraudsters who were trying to become investors had swindled an increment of R&850 this is around ($210 million). Though, the government doubted that this was not the actual figure but it almost amount to(R$1 billion) which was around ($248 million).
The cryptocurrency firm was located in Novo Hamburgo where the fraudsters were conducting their illegal business. The Federal Revenue Agency and the Brazilian Federal Police decided to work together in this operation to pin the criminals down. Operation Egypto decided to fully carry out 10 arrest warrants, 25 search and seizure orders across eight Brazilian cities. The unification of the two entities was to get rid of the illegal business.
Eduado Dalmolin Boliis who is in charge of Federal Police Office of Corruption and Financial Crimes according to the reports, emphasized that using digital assets as a medium of exchange is not against the law but it is illegal to conduct such businesses without approval from the authorities and that was where the so called company committed offense.
The cartels were not investing in the digital assets, but were working together to protect their own interests by increasing their collective profits by means of price fixing, limiting supply, and other restrictive prices and spending the swindled money extravagantly on items such as expensive cars, real estates, jewelry and other non-essential things. This was according to the analysis conducted by Egypto’s principles.
The law enforcers have taken possession of the illegal company’s financial assets, properties consisting of lands and houses, 36 number of expensive cars and a large sum of money which was yet to be revealed. The cartel was charged for criminal offenses like, misappropriation of funds, falsifying of financial information, concealment of illegally obtained money, planning and executing the offenses.
The police also confiscated mining equipment worth R$250,000 ($63000) during the investigation process. This was not the first cryptocurrency crime in Brazil, but earlier this year the Brazilian law enforcers had apprehended a criminal involved in drug trafficking and counterfeit money using bitcoin.
Brazil is not the only country that has experienced cases of fraud in the cryptocurrency industry, but also countries using crypto exchanges due to lack of high standard financial security systems.