Brazil’s Bitcoin King stopped over 7,000 missing BTCs

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Self-proclaimed Bitcoin King Claudio Oliveira has been arrested and charged by Brazilian Federal Police for allegedly staging a 1.5 billion reais (roughly $ 300 million) fraud scheme involving crypto.

Oliveria was president of Bitcoin Banco Group, a Brazilian cryptocurrency brokerage firm that has been under investigation since 2019, claiming to have lost 7,000 BTC in investor funds.

According to a rough translation of a June 5 press release, the federal police in the metropolitan area of ​​Curitiba issued Oliveira and other members of the Bitcoin Banco group with a preventive arrest warrant, four temporary arrest warrants and 22 search and seizure warrants.

The Bitcoin Banco group has reportedly lured investors with promises of sky-high daily returns. The alarm bells started ringing in early 2019, according to police, when the platform started blocking takedown requests.

The platform claimed to have been hacked in May 2019, but apparently did not provide any evidence to support this claim. On June 6, a judge ordered the company to provide evidence of the hack after a former customer filed a complaint against the company. The company resolved the issue with the plaintiff in July.

In September, their accounts were frozen in court as they faced more than 200 lawsuits from disgruntled investors, with the incident estimated to have affected more than 20,000 investors.

Following the alleged hack, Bitcoin Banco Group filed in court an agreement with local authorities to reorganize finances and pay creditors to avoid bankruptcy in a bankruptcy court in Curitiba.

Despite Bitcoin Banco Group’s request for judicial recovery, the company reportedly operated as usual and neglected its obligations to the bankruptcy court, including by failing to reimburse its creditors. The platform even continued to seek new clients, launching public collective investment contracts that it had not registered with the Brazilian Securities Commission.

The investigation into Bitcoin Banco Group, dubbed “Operation Daemon”, revealed that investors’ funds had been misappropriated based on the interests of the head of the criminal organization.

A leaked 2018 tax return showed that Oliveira then claimed 25,000 BTC and 14 Brazilian properties among its assets.

Related: South African Asset Manager Denies Stealing Billions Of Users, Says $ 5 Million Lost In Hack

Oliveria faces charges of bankruptcy, embezzlement, money laundering and operating a criminal organization in Brazil.

The investigation also revealed that Bitcoin King may have implemented similar programs in the United States and Europe.

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