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Brazilian Federal Police has nabbed the leader and several members of the Bitcoin Banco Group for alleged embezzlement of funds worth 1.5 billion Brazilian reals (roughly US$300 million) in a fraud involving 7000 victims. The police named Claudio Oliveira, better known as “Bitcoin king”, as the leader of the group in a press release issued after the arrests.
Brazilian Police Arrests Bitcoin King for Fraud
The arrests were a culmination of a three-year investigation into Banco Group leader and businessman Claudio Oliveira. The Bitcoin Banco group rose to prominence in the country during a cryptocurrency boom by assuring its investors staggering profits on their funds.
In 2019, Banco Group reported the disappearance of 7000 Bitcoins, which led to the barring of client withdrawals from the group’s brokers. Following this incident, the group applied for a judicial recovery order — an arrangement that allows an entity to pay creditors and avoid bankruptcy. However, during this period the company resumed its normal services and failed to explain the missing coins. In fact, the group revived its platform and claimed before customers that none of its tokens were missing.
According to an attorney representing the group’s victims, there were multiple discrepancies between the number of tokens shown by the company and the audited data.
Meanwhile, the Federal Police initiated Operation Daemon with a task force of 90 federal police officers in Curitiba and the Metropolitan Region to investigate the group’s activities. At the end of these proceedings, the police concluded that client funds were illicitly transferred to Oliveira’s personal accounts.
Oliveira Faces Money Laundering Charges and Seizure of Personal Funds
As part of its proceedings, the police have arrested Oliveira and seized several of his personal assets like luxury cars, cash, and crypto hard wallets. In addition to this, Oliveira and the Banco group are facing many charges, including money laundering and fraud.
The Federal Police has also gathered intelligence against the accused from foreign agencies, which confirmed that Oliveira was involved in similar crimes in the United States and Europe.