This is the first time a Brazilian court has ordered the sale of a Bitcoin stash, the Bitcoin was seized from Tradergroup a company that was allegedly operating as a Ponzi scheme under the guise of a cryptocurrency investment firm, in 2019.
43 Federal Police officers executed five search and seizure orders in Espirito Santo, Mato Grosso do Sul, and Acre as part of the “Madoff” operation.
The revenues of this deal will be used to pay off some of Tradergroup’s outstanding debts to its former customers.
The court concluded last month that the auction will take place at Mercado Bitcoin, one of the country’s largest cryptocurrency exchanges.
The exchange sold nine lots of three bitcoins, plus the residual value, for no less than 2% of the market price. The cash obtained for the sale was then deposited to a court account in fiat currency.
Alexandre Senra, the Federal Public Prosecutor said:
There are many victims of Tradergroup with lawsuits, mainly in the State Court, asking for the money invested back, and now a portion of this money will be able to be returned, not all because the credit sold in [Bitcoin] was not enough to reimburse the losses.
This is the first time a Brazilian federal court has ordered the sale of a cryptocurrency asset via a commercial exchange, according to the judge who ordered the sale of bitcoins.
This does not, however, imply that Brazilian authorities are unconcerned about cryptocurrency-related crimes. In fact, the country has been one of the most active in South America in the cryptocurrency space.
Claudio Oliveira, commonly known as the Brazilian “King of Bitcoin,” was detained last month on suspicion of being involved in a $300 million fraud scam.
A police investigation linked anonymous cryptocurrency schemes to money laundering shell firms in the country resulted in the seizure of more than $33 million.
