Spanish Authorities Nabs Leader of Crypto-Linked Ponzi Scheme

The Spanish authorities have apprehended a man identified as A.R. and referred to online as “CryptoSpain” for a Ponzi Scheme. The suspect has been accused of pulling off a 260 million euro ($300 million) international investment scam.

As per the report, CryptoSpain is behind the Madeira Invest Club (MIC), which commenced operations in 2023. The private investment group had promised investors returns in the form of gold, cryptocurrency, real estate, and luxury yachts.

A Web of Deception Spanning Multiple Continents

The mouth-watering offers attracted many investors who became victims as the Madeira Invest Club operated as a Ponzi scheme. According to the Spanish authorities, over 3,000 were affected when CryptoSpain failed to pay investors after settling early investors.

New investors were left stranded when MIC failed to honor its settlement promises. Preliminary investigations carried out by the Spanish Civil Guard reveal that MIC was not engaged in any real economic activities with users’ funds.

Interestingly, MIC expanded its scheme to at least 10 different countries that cut across the U.S, Malaysia, Hong Kong, Portugal, and the U.K.

Crypto Community Urges Vigilance Against “Guaranteed Returns”

CryptoSpain was apprehended after a collaborative investigation known as “Operation PONEI.” The operation involved law enforcement agencies from several countries in the region where he operated, including Singapore, Thailand, among others.

The development has sparked reactions from the crypto community online. A user emphasized that investors need to stop chasing ‘guaranteed returns’ hidden in blockchain jargon. He maintained that researching an investment offer remained critical, noting that if one cannot explain the principle, it is not an investment but fraud.

Other users called on prospective investors to always track money flow before committing their funds to any project. They noted that hype usually fades, hence it is key to demand real onchain proof before chasing returns meant to attract gullible investors.

Crackdown on Crypto Ponzi Schemes

Malicious actors have been taking advantage of unsuspecting investors in different Ponzi schemes. 

In September, India’s Enforcement Directorate filed charges against renowned businessman Raj Kundra. The authorities alleged that Kundra is in possession of 285 Bitcoin valued at $31 million, which are proceeds of crime.

In the U.S., prosecutors are determined to secure severe penalties for HashFlare co-founders, Sergei Potapenko and Ivan Turõgin. The duo was involved in a $577 million Ponzi scheme, and the sentence handed down by the judge has been considered too lenient.

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