Spanish police officers say they have taken apart a Bitcoin (BTC)-themed crypto pyramid scam that duped victims out of around $32.6 million.
Per the news agency EFE (via Infobae), police officers said they had “dismantled” a “criminal organization” that promoted “fake cryptocurrency investments.”
Spanish Police Make Arrests in Malaga, Madrid, Murcia
Officers said they have arrested eight people, but fear that “more than 3,600 people” have lost money to the crypto scam.
National Police Corp vehicles in Spain. (Source: Supertoni123 [CC BY-SA 4.0])
The National Police Corps (CNP)’s Economic and Financial Crime Unit said the network’s mastermind was a “computer programmer” whom they arrested in Malaga.
The CNP also made arrests in the cities of Murcia, and Madrid, detaining people of “various nationalities and backgrounds.”
The detainees include “marketing and web design experts,” officers said.
Police say the group developed a “seemingly legitimate platform that offered clients a choice of Bitcoin investment plans.”
They then allegedly promoted these products on various websites and social media platforms.
Victims, police said, “did not need to know anything about crypto,” as the alleged scam operators “made it easy for people to convert hundreds, even thousands of euros into Bitcoin.”
The alleged scammers were also able to dupe some “victims” into surrendering control of their electronic devices to “carry out crypto transfers themselves, in addition to stealing their personal and banking data.”
Operation Began in 2022 – Police
The CNP first learned of the operation in 2022, when a “victim” filed a report in Murcia.
As police investigated, they unearthed a complicated network of investments whereby older investors were paid using newer investors’ funds.
When people tried to withdraw their funds from the platform, the operators would reportedly concoct “obstacles” to delay or obfuscate the process.
One officer told EFE that some “victims” signed “contracts” with the operators, who “promised to pay dividends of 40% after one month,” and “up to 300% after a year.”
The police force eventually found a “trail” of fraud that “included thousands of victims in as many as 36 countries.”
‘Worthless Coin’
The CNP thinks that “at least 3,646 victims” lost their money to the scammers, 2,718 of whom are Spanish residents.
The fraudsters appear to have amassed vast Bitcoin holdings, with crypto wallets containing some BTC 400.
Officers say the masterminds also “created a new, worthless token” to investors.
The victims were mainly individuals who “had never invested in cryptocurrencies” before, the CNP said. Some corporations also fell victim to the scam, officers added.
Officers also froze 73 bank accounts and impounded cars, motorcycles, computer equipment, and hundreds of euros in cash.
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