Bitcoin’s rat lecture brings turmoil to Brazil’s “New Egypt”


Cabo Frio (AP), Brazil — In April, Brazilian federal police attacked a helipad in a seaside hotel in Rio de Janeiro. ..

The detainee told police that he works for GAS Consulting & Technology, a cryptocurrency investment company founded by a former waiter who turned from a former waiter, who is said to be one of Brazil’s largest rat lectures, to a millionaire. rice field.

According to police, the 38-year-old company owned by Glaidson Acáciodos Santos will have at least $ 7 billion (38 billion) between 2015 and mid-2021 as part of a Bitcoin-based Ponzi scheme that promises investors 10% monthly revenue. There was a real) transaction. ..

In the hundreds of pages of documents obtained by the Associated Press, federal and state police and prosecutors tricked thousands of small investors who believed they were getting rich from the sudden valuation of Bitcoin. Blame Dos Santos for running a sophisticated racket. He is currently in Rio Prison awaiting trial on charges of extortion, financial crime, attempted murder, and attempted murder of two business competitors. He remains under investigation for an attempted murder of a third competitor.

Dos Santos has repeatedly claimed his innocence. His lawyer did not respond to AP’s request for comment.

Despite the accusations, Dos Santos represents an unlikely hero for his supporters. Many consider him a modest black man and have made them wealthy by playing the financial system, which he believes his unorthodox Bitcoin business is equipped by the wealthy white elite. ..

The case also underscores Brazil’s desire for a rapidly growing cryptocurrency. In Brazil, years of economic and political crises have made digital currencies an attractive shield against Brazil’s real and double-digit inflation declines.

Bitcoin was very enthusiastic in Cabo Frio, the resort town that became the base of GAS. As GAS revenues increased and early adopters were enriched, copycat companies emerged and tried to earn cash. A wave of cryptocurrency-related violence continued.

Cabo Frio became known as “New Egypt” in the midst of so many suspected rat lectures. And as the town’s top dog, Dos Santos was called the “Bitcoin Pharaoh”.

According to police, Dos Santos began trading in Bitcoin in 2014 after quitting his job as a waiter. According to officials, he recruited clients from the Universal Church of God, who was once trained as a preacher, and promised referral fees to those who brought in new employees.

In a statement, the Universal Church accused Dos Santos of “harassing and recruiting” pastors and their herds to join his company.

By 2017, Dos Santos had earned serious money and was in the spotlight of the authorities. That year, his company’s transactions totaled R $ 10 million ($ 1.8 million), 15 times more than the previous year. The country’s financial intelligence unit has also noticed that companies registered as restaurants regularly trade cryptocurrencies on online exchange platforms.

The prosecution states that the alleged plan worked as follows: The client has deposited money in a bank account operated by a management partner. The money was then sent to Dos Santos or his Venezuelan wife Milleris Joselin Diaz Zelpa.

The client was promised a return on investment of 10% each month on a 12-48 month contract, but did not own Bitcoin, which GAS was said to have bought with money. And they were convinced it was risk-free: they would regain their entire initial investment at the end of the contract.

As Bitcoin’s fever grew, Dos Santos quickly became a celebrity in Cabo Frio.

“If he wants to run for mayor and governor, he will win,” said Jillson Silva do Carmo, 52, one of the victims of Dos Santos.

A chubby young man with thick-rimmed glasses was also flooded with contracts from Latin America, America, Europe and elsewhere in the Gulf, buying expensive jewelry and fashionable apartments and enjoying a high life.

According to experts, Brazil’s generous legislation regulating cryptocurrencies has helped boost the rise of Dos Santos.

At the same time, Brazilian securities regulators have made cryptocurrencies more attractive: it allowed national investment funds to invest in digital currencies in 2018, giving them great credibility. Last year, Brazil approved a Bitcoin exchange-traded fund. This is the second approved country in the world.

In and around Cabo Frio, many began to be afraid to miss it when they saw their neighbors get paid for investing their savings in GAS.

Do Carmo was in it.

Did Carmo invest more than half of his retirement fund after his therapist sold him his home to invest in GAS and told him he was receiving a monthly return of 10% for a year?

In Cabo Frio, the success of Dos Santos influenced others. Some competitors have promised even higher returns — more than 20% a month.

Dos Santos was not happy.

In mid-April, he discussed with his peers how rivals were breaking into his territory, according to a WhatsApp message intercepted by federal police.

Four months later, cryptocurrency trader Wesley Pessano was shot dead in Porsche. Police have accused Dos Santos of ordering a hit.

Rio state police also linked two attempted killings to Dos Santos. On March 20, a trader was shot dead while driving a BMW in Cabo Frio. Three months later, an operator from another company was targeted and his car hit 40 bullets. Both survived.

Things came to mind on April 28 when Rio police seized R $ 7 million at the heliport of an insolite boutique hotel on the outskirts of Cabo Frio. After that, a one-month survey of Dos Santos’ business was conducted.

On August 25, federal police attacked more than 12 locations related to GAS. This includes the home where Dos Santos was found and arrested for R $ 2.5 million. The agent also found a hard drive containing 10 times that amount in Bitcoin, Gold Bars, Jewelery, and some sports cars.

According to officials, 16 associates, including Diaz Zelpa, wife of Dos Santos, who left the country a few weeks before the attack and is believed to be in Florida, were also charged. They say she has withdrawn more than 4,300 Bitcoins worth $ 185 million (Real 1 billion).

Did you see Carmo in horror? He had invested the rest of his savings in the company just a few weeks ago.

“I thought,’My God, what did I do?'” He said. “You see everything you fought and your life is washed away from one moment to the next.”

Brazilian law enforcement agencies are still trying to uncover the true size of the Dos Santos Empire.

Prosecutors have identified at least 27,000 casualties in at least 13 Brazilian states and seven other countries, including the United States, United Arab Emirates, United Kingdom, and Portugal.

However, the actual tally is likely to be much higher, said Luciano Regis, a lawyer representing dozens of victims.

“It’s hard to talk to people in Cabo Frio who don’t know who invested,” he said.