Brazilian police crack down on ‘Bitcoin Sheikh’ for defrauding victims of $766 million: Report
by James · October 7, 2022
Another day, another Ponzi.
Yesterday morning, 100 police agents spread across three of Brazil’s federal states raided 20 addresses linked to a crypto fraud network controlled by Francisco Valdevino da Silva, also known as “Sheikh dos Bitcoins”.
De Silva’s group is suspected of defrauding and laundering up to 4 billion Brazilian reals (about $766 million) from “thousands” of Brazilians and citizens of at least ten other countries, according to authorities.
The victims were promised monthly returns of up to 20% on their investments. Da Silva and his captors lured their victims by claiming to have a large team of expert crypto traders dedicated to making money.
The gang is said to have even created and marketed their own cryptocurrencies, although the assets had no backing or liquidity upon investigation.
Local news source g1 said several domestic celebrities were defrauded by da Silva’s scheme, including Sasha Meneghel, daughter of Brazilian TV star Xuxa, who reportedly lost 1.2 million reals (about $230,000), along with several named soccer players.
The federal police nicknamed the raids “Operation Poyais” after nineteenth-century Scotsman and confidence trickster Gregor MacGregor, who sold bonds and deeds for the fictitious country of “Poyais”.
The international investigation began in March this year after the US Department of Homeland Security requested international police cooperation through the global police network Interpol.
Members of Da Silva’s family have been implicated both as employees of the fraudulent companies and recipients of loot.
Bitcoin schemes on the rise
Unfortunately, Ponzi schemes are all too common in the unregulated wild west of crypto.
Back in August, the Commodity and Futures Trading Commission (CFTC) filed a civil enforcement action against a man for allegedly running a $12 Million Bitcoin Scam.
Rathnakishore Giri of New Albany, Ohio, allegedly convinced over 150 investors to hand over $12 million in cash plus at least ten Bitcoin, today worth $178,113. He then used the allocated funds to pay for “yacht rentals, luxury vacations and luxury shopping,” the CTFC said.
Also in August, Argentina’s eccentric Bitcoin presidential candidate Javier Milei was sued for allegedly promote a crypto-Ponzi scheme. Last year, Miley shilled a crypto investment platform called CoinX to his 1.3 million Instagram followers.
CoinX claimed to use AI, robots and expert traders to generate significant returns, but the platform closed shop after the National Securities Commission (CNV) warned that it had no legal right to operate in the country and ordered it to cease operations. Nor had it paid the investors’ expected returns.
Recently a Florida man pleaded guilty in federal district court Thursday for participating in another scheme that defrauded investors of roughly $100 million. Joshua David Nicholas promised investors a daily profit of one percent through a combination of his own trading knowledge and that of a state-of-the-art, but non-existent, “trading bot”.
This month, the US Securities and Exchange Commission cracked down on one 12 million dollar cryptoponzi scheme targeting Latino investors. Purloined funds were spent on cars, jewellery, adult entertainment and the purchase and development of real estate.
