U.S. authorities seized over $25 million worth of cryptocurrency in one of the biggest pyramid schemes in Brazil. The joint initiative —started by the Brazilian authorities aimed to end a scam of more than $200 million that gained high popularity in Brazil since its founding in 2017 and had already claimed at least 23.200 victims. According to the United States Department of Justice, authorities could confiscate $25 million in crypto stored by the criminals in a financial institution —probably some exchange or custodial service.
The pyramid scheme was running in Brazil since 2017.
The investigations targeted InDeal, a fraudulent pyramid scheme running in Brazil since 2017, which promised investors returns of up to 15% after one month of investment. The criminals asked for a payment in cryptocurrency, and the company was supposed to invest the funds in other crypto assets. However, this did not always happen, and a large part of the money went into scammers’ pockets. According to local reports, some of the team’s 15 members under investigation raised their worth by as much as 100 times.
Crypto scams increase this year amid the ongoing pandemic.
The US Justice Department explained that Marco Antonio Fagundes —one of the masterminds behind the whole operation—did not comply with Brazilian regulations as a financial service provider. In addition, he offered high ROI for those who bet on cryptocurrency products. Cryptocurrency-related scams have reportedly increased significantly this year amid the ongoing global pandemic. A Brazilian court found that very little returned to investors, as Fagundes and his team came up with “false and inconsistent promises,” lying about how they were administrating the investors’ funds, all with the intention to get away with it and keep the scam running.
Crypto scams like pyramid schemes, malware attacks, and crypto theft have become quite prevalent this year amid the ongoing pandemic.