Brazil court orders ‘Bitcoin Pharaoh’ to return $3.7B to victims of Ponzi scheme
A federal court in Rio de Janeiro has ordered Glaidson Acacio dos Santos to deposit the sum of 3.7 billion dollars to investors. The court earmarked the amount as reimbursement to victims of the defendant’s alleged Ponzi scheme.
Commonly known as the Bitcoin Pharaoh, Dos Santos and his company, GAS Consultoria e Tecnologia, told investors they would earn an impressive 10% monthly return on their digital assets. However, this promise turned out to be false when Dos Santos spent the funds on luxury goods and turned the operation into a pyramid scheme to lure new investors.
Federal police acting on a tip carried out a series of raids in various locations that led to the arrest of Dos Santos and five others. The raids were codenamed “Operation Kryptos”, with police confirming they seized up to 591 BTC, 21 luxury cars, expensive watches and other items.
Dos Santos has 72 hours to comply with the court’s decision to deposit the amount, but parties interested in the case are unsure whether he will comply or not. According to details obtained from the firm’s website, over 122,000 investors parted with their money, and local publication O Globo stated that the aggrieved investors are seeking nine billion Brazilian reais in compensation.
Dos Santos, a former waiter, rose to the top of the Brazilian aristocracy after turning to BTC and aiming to run for political office. However, his ambitions were rejected by the Regional Electoral Court of Rio de Janeiro, which rejected his candidacy.
“The candidacy of the businessman, who remains in prison, was unanimously challenged by the regional electoral court, on the grounds that Santos is the director of a financial institution subject to liquidation,” wrote a local news channel. “The rapporteur for the case, Judge Luiz Paulo da Silva Araujo Filho, pointed out that Santos is accused of federal crimes, including links with the militia.”
Brazil’s tango with digital assets
In Latin America, Brazil is becoming the nation with the highest adoption rates for virtual currencies. Shortly after El Salvador adopted BTC as legal tender, there was widespread speculation that Brazil would be next in line, but such a move did not materialize.
The country’s Senate seized on the buzz to pass a comprehensive law that will lay the foundation for future regulations in the ecosystem. A key provision in the law is the provision of severe penalties for fraudsters with digital assets in the country and the establishment of an enabling environment for mining.
“Regulation is very welcome [and] The trend is that Brazil follows the largest economies in the world and facilitates the extraction of these coins on Brazilian soil, says Bernardo Schucman, senior VP of CleanSpark.
See: Regulatory Compliance for Blockchain and Digital Assets
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