South America has become a huge haven for cryptocurrency. Unfortunately, being a haven for digital currency activity can have a bit of a downside.
Crypto Crime Is Still Prominent
Recently, a massive cryptocurrency crime cartel in Brazil was shut down by officials after leaders conned over 50,000 people out of more than $200 million. Investors were allegedly putting their money into a fake cryptocurrency – one that was being run through an unlicensed financial institution.
For banks to operate in Brazil, they need authorization from the nation’s Central Bank. Without it, the institution is considered null and void. The criminals were also claiming to offer cryptocurrency returns of approximately 15 percent or more.
Stories like this really bring about an ugly truth; that crypto isn’t quite where it should be. We hear stories all the time that suggest crypto is a legit enterprise doing good in the world. Look at Venezuela, for example. The country was once the richest nation in South America, but it’s socialist agenda (brought on by current president Nicolas Maduro) has introduced mass inflation and other economic problems that have brought the country into a low period swamped with poverty and starvation.
The people have consistently turned to cryptocurrencies such as Dash and bitcoin to solve their financial problems, and thus far, the results have been good. South America and other ailing regions of the planet can learn a lot from crypto, and benefit from its advantages.
So, when an issue like this comes along, it really puts a damper in all the progress that’s been made thus far. The Federal Reserve Service in Brazil claims that the criminals managed to raise a total of $210 million since last February. That’s some serious (and fraudulent) profit for only three months.
At press time, it appears the operation has been dismantled by authorities from the Brazilian Federal Police and the Federal Revenue Agency. Overall, 10 arrest warrants were issued, along with 25 search and seizure orders in eight different cities.
Investigators also say that the criminals were not investing in any cryptocurrencies but were rather spending investors’ money on lavish items such as real estate, cars and even jewelry. At the time of writing, several of these items – including condominiums and luxury vehicles – have been confiscated by federal officials. They’ve also uncovered mass amounts of money, though how much has not yet been disclosed.
Don’t Operate a Brazilian Bank without a License!
Leaders of the group are now being charged with several counts of fraud, money laundering and financial misappropriation. Strangely, officials say that the biggest crime at hand is the fact that the individuals operating the financial institution were doing so without the required paperwork.
Previously, police had arrested a man in Brazil who was later charged with laundering money with bitcoin and harboring drugs.