The Brazilian Federal Police has dismantled a cryptocurrency fraud scheme, which allegedly stole and defrauded at least 1.5 billion Brazilian reals (about $300 million) from more than 7,000 victims.
After an investigation that lasted nearly three years, the authorities were able to gather enough evidence to arrest Claudio Oliveira, known as the “King of Bitcoin.”
Oliveira served as the head of the Bitcoin Banco Group, a popular finance company that made its name during the crypto boom by promising extraordinary profits to those who trusted it with their money.
At the end of 2019, the Bitcoin Banco Group reported the disappearance of 7,000 bitcoins and applied for an injunction , a special arrangement approved by the Brazilian authorities in which the company reorganizes and manages its finances so it can pay creditors and avoid bankruptcy.
But during this time, the company continued to offer its usual services while failing to explain the reasons behind the disappearance of cryptocurrencies.
Instead, it offered an updated version of its platform, assuring customers that cryptocurrencies exist.
According to a lawyer acting on behalf of Bitcoin Banco clients, there were discrepancies between the amounts the company expressed and what the audited data showed.
The company also failed to provide wallet data that could clarify the problem.
While all of this was happening, the Federal Police formed a task force of 90 officers to investigate Grupo Bitcoin Banco.
It concluded that funds from the group’s clients were infrequently transferred to Oliveira’s personal accounts.
In addition to his arrest, the Federal Police confiscated several assets owned by Oliveira, including a collection of luxury cars, large sums of cash, and cryptocurrency wallets.
The police found many crimes on top of them: money laundering, fraud and other charges against “Group Bitcoin Banco” and “Olivera”.
Intelligence exchanges between the Federal Police and foreign agencies confirmed that Oliveira was previously under investigation in the United States and Europe for similar crimes.