The United States Homeland Security Investigations (HSI) and the U.S. Immigration and Customs Enforcement (ICE), in conjunction with local Brazilian security agencies, announced the discovery of a digital asset fraud ring allegedly responsible for defrauding thousands of investors. Operating out of Curitiba in Brazil, the ring had extensive international links as they lured their victims from over 12 different countries.
The ring was exposed by a coordinated raid by Brazilian authorities on over 20 locations in the cities of São Paulo, Rio de Janeiro, Santa Catarina, and Parana. The bust by the operatives was part of long-running investigations that shed light on the gang’s modus operandi.
The suspects paraded themselves on social media as having developed revolutionary digital asset products that would earn investors impressive returns, authorities said. The concerted investigations revealed that the virtual assets held little to no value. By the end of their multi-year spree, over $800 million had been moved through Brazilian financial institutions.
“We are grateful to the Brazilian Federal Police for their continued partnership in combating transnational financial fraud schemes,” said Eric Cardiel, HSI Brazil Acting Attaché. “This shows the importance of international collaboration when it comes to disrupting criminal organizations operating in multiple countries around the world.”
Francisley Valdevino, “a 37-year-old Brazilian national and former U.S. resident,” has been named leader of the ring. Meanwhile, the ICE disclosed in a press statement the offenses committed by the gang, which include “international money laundering, operating a criminal enterprise, fraud, and crimes against the national financial system.”
Brazil’s digital asset terrain is a minefield
Brazil’s virtual currency ecosystem has a long streak of being used by bad actors to perpetuate scams and fraudulent schemes. The country’s police have been carrying out raids against rings engaged in fraud, with the most recent involving the seizure of 591 BTC valued at $27 million from a firm operating a digital asset Ponzi scheme.
Earlier this year, local police nabbed 38-year-old Glaidson Acacio dos Santos in connection with a Bitcoin Ponzi scheme that saw transaction volumes run into $7 billion in its six years of operation.
While the executive arm has been showing great zest in sanitizing the ecosystem, legislators are also playing their role in regulating it, with the approval of a new framework for virtual currencies by the Brazilian Senate. Meanwhile, the nation’s securities watchdog is pining for the widening of its powers as it wishes to play an active role in regulating the industry.
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