Claudio Oliveira, owner of the Bitcoin bank in Brazil and known as the “King of Bitcoin”, was arrested yesterday for alleged involvement in a $ 300 million fraud scheme. According to inquiries from federal agencies, Oliveira forged a Bitcoin hack back in 2019 that caused his company to lose a significant amount of Bitcoin. More than 7,000 customers lost their money in this fake hack.
“King of Bitcoin” arrested in Brazil
Brazilian federal police arrested Claudio Oliveira yesterday for alleged involvement in a $ 300 million fraud program. Oliveira, who owned Bitcoin Bank, reported a Bitcoin hack in his company back in 2019. However, according to police investigations, it was a staged crime to cover the withdrawal of these cryptocurrencies. The Brazilian police also confiscated eight luxury cars and jewels.
Operation Daemon, which went against the Bitcoin Bank scheme, led to the arrest of four other people. Police raided 22 locations in one of the largest operations against a cryptocurrency organization in the country. 90 police officers took part in the sting.
The police organized this task force after Bitcoin Bank did not cooperate in the investigation into the alleged fake Bitcoin hack. While the authorities were investigating the crime, the organization received a court order that allowed them to continue operating. Oliveira is now charged with embezzlement, money laundering, criminal association and crimes against the national financial system.
Bitcoin Bank had a “private blockchain”
The police found that the Bitcoin Bank operated a so-called private blockchain. When customers deposited their funds, the system forged operations that showed customers were making arbitrage profits. But the incoming and outgoing funds showed inconsistencies with the checks of the system by forensic investigators. After the seizure, the federal police took ownership of the cryptocurrency accounts managed by Bitcoin Bank. However, they claim that there are insufficient funds to pay all of the creditors.
This alleged Ponzi scheme affected more than 7,000 investors, including employees and service providers of the group. However, this is not the first time Oliveira has come into conflict with the judiciary. According to Brazilian investigators, the king of Bitcoin has committed crimes of the same type in the United States. In addition, Oliveira committed embezzlement and forgery of documents in Switzerland in 2000.
What do you think of the King of Bitcoin’s alleged $ 300 million scam? Let us know in the comments section below.
Photo credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.