PF and Revenue take new action against cryptocurrency fraud

Federal Police Headquarters in Brasília (Marcelo Camargo/Agência Brasil)

Federal police are currently serving (9) two preventive arrest warrants and two search and seizure warrants against those accused of engaging in fraud through operations with cryptocurrencies in Rio de Janeiro. This is the second phase of Operation Kryptus, which has the support of the Federal Revenue and which investigates the illegal practice of financial pyramid.

According to the Internal Revenue Service, the company located in Região dos Lagos in Rio de Janeiro acts as if it were an investment fund, in which the investor acquires a certain amount of shares and receives fixed income.

As in a volatile market such as cryptocurrencies (which include bitcoins), it is not sustainable to promise a fixed return to investors, the company would resort to a financial pyramid.

The pyramid is an illegal scheme in which profit is generated by bringing in new customers and not by the profitable nature of the operations. And, to avoid the system’s collapse, it is necessary to keep expanding the client network.

The scheme generates enrichment for the pyramid’s mentors who, according to the Revenue, do not declare their profits to the tax authorities.