Claudio Oliveira, the Bitcoin King of Brazil, has been apprehended by the country’s Federal Police for embezzling cash worth 7000 Bitcoin in a scam.
According to reports, the suspected fraudster’s cryptocurrency brokerage filed for bankruptcy in 2019 after claiming to be the victim of a cyberattack.
Claudio Oliveira, a self-acclaimed “Bitcoin King,” has been detained and indicted by Brazilian federal police for allegedly orchestrating a fraud operation involving cryptocurrency worth 1.5 billion reais (about $300 million) in which he was involved.
Oliveria formerly served as the president of Bitcoin Banco Group, a Brazilian cryptocurrency brokerage business that has been under investigation since 2019 for allegedly misappropriating 7,000 BTC in investor cash, according to the inquiry.
Federal police from the Curitiba Metropolitan Region issued one preventative arrest warrant, four temporary arrest warrants, and 22 search and seizure orders on Oliveira and other members of the Bitcoin Banco Group on June 5, according to a rough translation of a news statement dated that day.
Investing in the Bitcoin Banco Group was said to have been enticed by the promise of extravagant daily profits. As reported by the police, the platform began rejecting withdrawal requests at the beginning of 2019 and this triggered the first warning bells.
However, according to reports, the platform failed to produce proof to back up its allegation that it had been hacked in May 2019. Following the filing of a lawsuit against the business by a former client, a court ordered the firm to produce proof of the hack on June 6, 2013.
In July, the business reached a settlement with the plaintiff.
By September, their accounts had been blocked by the courts as a result of more than 200 lawsuits filed by dissatisfied investors. It is believed that the event affected more than 20,000 investors as a result of the occurrence.
As a result of the alleged attack, Bitcoin Banco Group filed for judicial recovery with a bankruptcy court in Curitiba, which is an arrangement with local authorities to reorganise finances and pay creditors in order to avoid bankruptcy.
Despite the fact that Bitcoin Banco Group had filed for judicial recovery, the company is said to have continued to do business as normal and failed to meet its commitments to the bankruptcy court, which included neglecting to reimburse creditors.
Moreover, the site continued to look for new clients, issuing “public collective investment contracts” that were not registered with the Brazilian Securities Commission (Comissao de Valores).
In the course of the investigation into Bitcoin Banco Group, nicknamed “Operation Daemon,” it was discovered that investors’ cash had been “diverted in accordance with the interests of the criminal organization’s leader.”
According to a leaked tax return from 2018, Oliveira had then claimed 25,000 BTC in Bitcoin as well as 14 Brazilian homes among his holdings.
Oliveria is facing accusations in Brazil for bankruptcy crimes, embezzlement, money laundering, and running a criminal organisation, among other charges.
According to the findings of the inquiry, the “Bitcoin King” may have run similar scams in the United States and Europe.