Federal Revenue Service, the financial governing body of Brazil, announced that a criminal gang duped 55,000 investors by swindling over $200 million. All of these investors were duped by the gang by promising exponential returns, the FRS stated.
The recent bull rush in the market provoked many Brazilians to try their hand in investment schemes related to cryptocurrency. According to the FRS, the gang took advantage of novices in the field of cryptocurrency and persuaded them to open wallets by promising them a 15% return on the invested money within a specific duration.
They had raised $210 million, according to information released by the Federal Revenue Service. After the first complaint of such a scam reached the department, the Federal Police Department launched an undercover operation, named Operation Egypto to catch the cartel red-handed.
An official statement released by officials involved in the operation stated that crypto-trading was not considered to be illegal in the country, but revealed that the company used to front the scam was unregistered. The crypto-business was running without the approval of the governing body and without any license.
Eduardo Dalmolin, a Senior official at Office of Corruption and Financial Crimes, clarified,
“The problem with this company is that it was acting without authorization.”
The report also stated that the company’s employees were not using the investors’ fund to buy and sell cryptocurrencies. Rather, they were putting money into other low revenue generating investment schemes.
The news of the fraud in Brazil came to light weeks after the Binance hack. Binance, considered the largest cryptocurrency exchange in terms of trading volume, shocked crypto-fans around the globe after it announced a large-scale security breach. This led to $40 million worth of cryptocurrencies being stolen from Binance, following the hacks on Cryptopia and Bithumb earlier this year.
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