Brazilian police carried out searches at 20 addresses across three states tied to a case of international cryptocurrency fraud valued at €780m, according to The Portugal News.
Authorities did not disclose the suspects’ names. According to the media, the scheme was led by Francislei Valdevino da Silva, known as the ‘Bitcoin Sheikh’.
The group is suspected of deceiving thousands of investors in Brazil and at least ten other countries, including the United States.
The investigation began in March after local police received information from U.S. authorities via Interpol, relating to money laundering and international online fraud.
According to the statement, the principal suspect formed a criminal group with several family members and siphoned off the sums invested by victims in reais and cryptocurrencies.
The perpetrators operated a Ponzi scheme, promising investors up to 20% annual returns. They paid early investors using funds raised from new entrants.
Instead of profitable investments in cryptocurrencies, the suspects used large sums to buy luxury real estate, jewellery, luxury cars, boats and clothing, police said.
Among those affected were several football stars, names not disclosed. Model Sasha Meneghel, daughter of pop singer and television presenter Xuxa, invested 1.2 million reais (€240,000) in the pyramid.
Earlier in August, U.S. authorities accused 11 people of creating and promoting the international cryptocurrency pyramid Forsage worth $300m.
The largest Ponzi scheme in the industry remains OneCoin, in which up to $4bn is believed to have disappeared. ForkLog reported on the fraud and its organizer, the missing Ruja Ignatova, in a feature.
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