The Brazilian police made an astounding seizure of $28.5 Million worth of Bitcoin earlier in the week. The seizure was part of an alleged Ponzi scheme and was the largest such haul in Brazil’s history. The total number of BTC seized was around 591 Bitcoins.
In addition to the Bitcoin, the police also seized 21 luxury cars and high-value goods and arrested five individuals related to the scheme.
A System Of Ponzi Schemes
The Brazilian police issued a press release stating that a company with its operations based in the region of Lagos was operating a series of Ponzi schemes that were linked to the cryptocurrency market. The companies that were part of the fraud had billions of dollars, out of which more than half the transactions were carried out as recently as last year.
The police also seized luxury goods, luxury watches, over $3 Million in cash, and over 21 luxury cars. One of the arrested individuals was Glaidson Acacio, who was running the scheme that promised investors returns of up to 15%. The Bitcoin seized by the police will be liquidated, and all of it will be made available to the courts.
The operation called “Operation Kryptos” was the largest seizure of cryptocurrencies by the Brazilian task force. The operation and seizure come hot on the heels of the police arresting a “Bitcoin King” in a separate case that involved a $300 Million embezzlement scheme .
The Africrypt Scam
Crypto investment platform Africrypt fell to a major investment scam when the founding brothers disappeared with over $3.6 billion of investor money. The hack was kept a secret for months after the hack in April 2021. $3.6 Billion was siphoned out of investor wallets. However, the event did not attract the attention of the global crypto community because the investors were specifically asked to keep the news under wraps and not inform the authorities under the guise that it would hamper the recovery process.
One excerpt from the message sent to investors reads as follows,
“We urge all clients to please be patient as we attempt to resolve the situation at hand. It is understandable that clients may proceed the legal route, but we ask clients to please acknowledge that this will only delay the recovery process.”
An Inside Job
Days after the incident, the founding brothers’ Ameer and Raees Cajee fled to the UK, with both brothers unreachable, which pointed to their role in the hack. Calls to the brothers went unanswered, and the company website went offline.
One of the addresses used by the hackers that hacked the private wallets were used for a standard transaction before the hack, indicating the role of an insider or insiders. Investigators are also looking at the transactions in other large local exchanges to track the stolen money.
A Potential Money Laundering Operation
Multiple agencies and regulatory authorities are investigating the hack and the operations of Africrypt. There are tell-tale signs of a money-laundering operation as an exchange that was operational for only two years had assets over $3 billion. Another indicator is that clients were made to sign an agreement that limited the liability of Africrypt in case of any loss of funds. Darren Hanekom from Hanekom Attorneys stated,
“Whilst we are aware of the many opportunities available for young people in the cryptocurrency space, we were suspicious of the claims that over 100 000 Ethereum coins were mined from home-based computer systems. Given South Africa’s high electricity costs, and unstable power generating capabilities, we found this claim particularly difficult to accept.”