The Spanish Civil Guard have arrested one of Europe’s biggest alleged cryptocurrency fraudsters, in an operation in Valencia last week.
The authorities detained a 45-year-old Portuguese national, as well seizing more than €2.5 million worth of assets.
The man is suspected of fraud and money laundering, using an apparent online cryptocurrency investment platform, which attracted investments from people and companies in Spain, Portugal and Luxembourg.
The police operation, named “Bitdrop” began in August, after the authorities were tipped off by a private detective agency that had been employed by a disgruntled investor to investigate the platform.
The platform offered a “minimum return of 2.5% a week” to investors, which was in fact a classic Ponzi scheme, with ” returns” being being paid for by the funds provided by new investors.
The scheme encouraged victims to invest ever-greater amounts of money and to also work to attract more investors. The funds were allegedly being used by the suspect to pay for a high standard of living, including the purchase of luxury cars, vacations and meals.
The police investigation served to identify a number of the victims in Spain, and also determined that the suspect had allegedly committed offenses in Luxembourg, Switzerland and Portugal. On December 2, three searches were carried out: in the man’s home, business headquarters and workshop where some of his assets were hidden, according to the Civil Guard.
In addition, a number of bank accounts and websites have been blocked, as well as the sites where it was advertised. Documents and electronic devices – including computers, tablets, cellphones and USB cryptocurrency wallets – have also been seized.
A total of 20 luxury vehicles have been seized with a total value of the assets frozen, including cars and bank accounts, of over €2.5 million.
Cryptocurrencies are digital payment systems that do not rely on banks to verify transactions, and their boom has resulted in an exponential rise in related scams over recent years.
The United States Federal Trade Commission Consumer Sentinel reports that shy of 7,000 people registered losses of over USD 80 million from October 2020 to 31st March last year.
This is an almost 1,000 percent rise in reported losses from the same period the previous year.
The investigation continues.