Claudio Oliveira, the operator of Brazil’s Bitcoin Bank and dubbed the “King of Bitcoin,” was arrested on 5th July 2021 for his alleged involvement in a $300 million fraud scam. Oliveira allegedly staged a Bitcoin breach in 2019 in which his firm lost a substantial quantity of bitcoin, according to federal investigators. This phoney attack resulted in the loss of money for over 7,000 clients.
However, police investigations have revealed that this was an orchestrated incident to conceal the removal of these bitcoins. Eight expensive automobiles and jewels were also confiscated by Brazilian police. Four additional people were arrested as part of Operation Daemon, which targeted the Bitcoin Bank scam. In one of the country’s largest raids against a cryptocurrency group, police raided 22 sites. A total of 90 policemen took part in the sting.
After the Bitcoin Bank refused to cooperate in the investigation of the alleged fake Bitcoin breach, the police formed this task force. The group got a judgment order enabling them to continue functioning while the authorities investigated the crime. Oliveira is currently accused of theft, financial fraud, criminal organization, and offenses against the financial system in Brazil.
The Bitcoin Bank was discovered to be running a so-called private blockchain, according to the police. If users deposited their funds, the system staged transactions that seemed to show customers profiting from the exchange. However, forensic analysts discovered anomalies in the cash flowing in and out of the system. Following the confiscation, Federal Police took control of the Bitcoin Bank’s bitcoin accounts. They argue, however, that there is insufficient cash to satisfy all creditors.
More than 7,000 investors, including corporate workers and service suppliers, were allegedly impacted by this alleged Ponzi scam. Oliveira, on the other hand, has had a run-in with the law before.
According to Brazilian investigators, the King of Bitcoin perpetrated similar crimes in the United States. In 2000 in Switzerland Oliveira was also charged with embezzlement and document falsification. Thousands of investors are said to have been affected as a result of the scam.