Brazil's "Bitcoin King" and Company Arrested for Alleged Embezzlement of $300M in Crypto

Cláudio Oliveira, a self-proclaimed 'King of Bitcoin' has been arrested by the Brazilian police for allegedly masterminding a 1.5 billion reais (roughly $300 million) fraud scheme involving crypto.

Oliveria served as the president of Bitcoin Banco Group, a Brazilian crypto brokerage firm that has been under investigation since 2019 claiming to have lost 7,000 BTC in investor funds.

The company at that time also applied for judicial recovery — a special arrangement under the Brazilian law to reorganize its finances — in a bid to pay its creditors and avoid bankruptcy.

However, at the beginning of 2020, it was found that the group was not complying with the obligations determined at the time of the decree of judicial reorganization and, to promote its activities and attract new customers, it continued to offer the public collective investment contracts without registration with the market regulator.

The investigation into Bitcoin Banco Group, dubbed "Operation Daemon," found that investors’ funds had been “diverted according to the interests of the criminal organization leader.”

According to a rough translation of a June 5 press release, federal police from the Curitiba Metropolitan Region served Oliveira and other members of Bitcoin Banco Group with one preventive arrest warrant, four temporary arrest warrants, and 22 search and seizure warrants.

Bitcoin Banco Group reportedly lured investors with promises of exorbitant daily returns. According to police, alarm bells first began ringing early in 2019 when the platform started blocking withdrawal requests.