Brazil Busts Crypto Pyramid Scheme Involving $210 Million
- The scheme offered 15 percent payout in the first month of investment.
Brazilain authorities have arrested ten people in a massive search and seizure operation for running a pyramid scheme involving Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term worth BRL 850 million (around $210 million).
As reported by local media platform Correio Do Povo on May 21, multiple agencies, including the police force and tax agency of the country, started a major investigation called Operation Egypto to take down the perpetrators operating the scheme.
The authorities investigated 13 individuals and five legal entities for their involvement in the scheme, named Indeal, which defrauded around 55,000 investors.
While talking to the press, the regional superintendent of the Brazilian police department stressed that the operators did not obtain a license and were receiving funds without authorization.
They lured thousands of investors with a guaranteed payout of 15 percent after the first month of investment.
The investigations also concluded that the scheme resembles a classic pyramid model and would collapse by a simultaneous withdrawal request by all its investors.
Indeal operators even used investor funds to purchase luxury items, including 36 cars and precious stones, all of which were seized by the authorities.
The company also maintained accounts in three banks, and according to the tax auditors, the deposits in all the accounts can exceed BRL 1 billion (more than 247 million). The auditors also revealed that 80 percent of the investors contributed around BRL 20,000 (near about $5,000).
Pyramid schemes siphoning funds
The combination of wild returns and minimum regulations has encouraged many fraudsters to lure investors towards shady schemes. In the United States, the Securities and Exchange Commission (SEC) recently halted the fundraising attempt by Argyle Coin, alleging the startup for running a Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term.
Moreover, the multi-billion crypto-based pyramid project Onecoin has also attracted the attention of regulators all around the world. Recently, in a statement, the company rejceted claims that it is operating a Ponzi scheme.
Brazilain authorities have arrested ten people in a massive search and seizure operation for running a pyramid scheme involving Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term worth BRL 850 million (around $210 million).
As reported by local media platform Correio Do Povo on May 21, multiple agencies, including the police force and tax agency of the country, started a major investigation called Operation Egypto to take down the perpetrators operating the scheme.
The authorities investigated 13 individuals and five legal entities for their involvement in the scheme, named Indeal, which defrauded around 55,000 investors.
While talking to the press, the regional superintendent of the Brazilian police department stressed that the operators did not obtain a license and were receiving funds without authorization.
They lured thousands of investors with a guaranteed payout of 15 percent after the first month of investment.
The investigations also concluded that the scheme resembles a classic pyramid model and would collapse by a simultaneous withdrawal request by all its investors.
Indeal operators even used investor funds to purchase luxury items, including 36 cars and precious stones, all of which were seized by the authorities.
The company also maintained accounts in three banks, and according to the tax auditors, the deposits in all the accounts can exceed BRL 1 billion (more than 247 million). The auditors also revealed that 80 percent of the investors contributed around BRL 20,000 (near about $5,000).
Pyramid schemes siphoning funds
The combination of wild returns and minimum regulations has encouraged many fraudsters to lure investors towards shady schemes. In the United States, the Securities and Exchange Commission (SEC) recently halted the fundraising attempt by Argyle Coin, alleging the startup for running a Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term.
Moreover, the multi-billion crypto-based pyramid project Onecoin has also attracted the attention of regulators all around the world. Recently, in a statement, the company rejceted claims that it is operating a Ponzi scheme.