Yesterday morning, 100 police agents spread across three of Brazil’s federal states raided 20 addresses linked to a crypto fraud network controlled by Francisco Valdevino da Silva, aka “Sheikh dos Bitcoins.”
De Silva’s group is suspected of having defrauded and laundered up to 4 billion Brazilian reals (about $766 million) from “thousands” of Brazilians and citizens from at least ten other countries, according to the authorities.
Victims were promised monthly returns of up to 20% on their investments. Da Silva and his goons baited their victims by claiming to have a large team of expert crypto traders dedicated to turning profits.
The gang even reportedly created and marketed their own cryptocurrencies, although on investigation, the assets had no backing or liquidity.
Local news source g1 said that several domestic celebrities were defrauded by da Silva’s scheme, including Sasha Meneghel, daughter of Brazilian television star Xuxa, who reportedly lost 1.2 million reals (about $230,000), alongside several unnamed soccer players.
The federal police nicknamed the raids “Operation Poyais” after the nineteenth-century Scotsman and confidence trickster Gregor MacGregor, who sold bonds and deeds for the fictional country of “Poyais.”
The international investigation began in March this year after the U.S. Department of Homeland Security requested international police cooperation through the global police network Interpol.
Members of Da Silva’s family have been implicated both as employees of the fraudulent companies and recipients of the plunder.
Unfortunately, Ponzi schemes are all-too-rife in the unregulated wild west of crypto.
Back in August, the Commodity and Futures Trading Commission (CFTC) filed a civil enforcement action against a man for allegedly running a $12 million Bitcoin scam.
Rathnakishore Giri of New Albany, Ohio, allegedly convinced over 150 investors to hand over $12 million in cash plus at least ten Bitcoin, today worth $178,113. He then used the appropriated funds to pay for “yacht rentals, luxury vacations and luxury shopping,” the CTFC said.
Also in August, Argentina’s eccentric Bitcoin presidential candidate Javier Milei was sued for allegedly promoting a crypto Ponzi scheme. Last year, Milei shilled a crypto investment platform called CoinX to his 1.3 million Instagram followers.
CoinX claimed to use AI, bots and expert traders to generate significant returns, but the platform closed shop after the National Securities Commission (CNV) warned that it had no legal right to operate in the country and ordered it to halt operations. It also hadn’t been paying investors' expected returns.
More recently, a Florida Man pleaded guilty in federal district court on Thursday to participating in another scheme that defrauded investors of approximately $100 million. Joshua David Nicholas promised investors daily profits of one percent through a combination of his own trading acumen and that of a state-of-the-art, though nonexistent, "trading bot.”
This month, the U.S. Securities and Exchange Commission clamped down on a $12 million crypto ponzi scheme targeting Latino investors. Purloined funds were spent on cars, jewelry, adult entertainment, and the purchase and development of real estate.