Spanish police successfully dismantled a large Bitcoin-themed pyramid scheme defrauding over 3,600 victims of approximately $32.6 million.
Operation and Arrests
The operation, led by Spain's National Police Corps, resulted in the arrest of eight individuals across multiple cities, including Malaga, Madrid, and Meria.
Complex Fraud Scheme
The group, consisting of various professionals such as marketing experts and web designers, ran a complex operation that promoted fake Bitcoin investment plans. The victims, often lacking prior knowledge of cryptocurrencies, found it easy to convert large sums of money into Bitcoin. Some victims were manipulated into surrendering control of their electronic devices, enabling the scammers to perform crypto transfers and steal personal and banking information.
Growing Threat of Scams
The police first learned of the scheme in 2022 when a victim filed a complaint in Murcia, revealing a fraudulent network where new investors' funds were used to pay older investors—a typical characteristic of a pyramid scheme. The scammers promised unrealistic returns of 40% after one month and up to 300% after a year. Investigators discovered substantial Bitcoin holdings in the criminals’ wallets, as well as a worthless token they issued to investors. The scam affected victims in 36 countries, with most residing in Spain. Authorities responded by freezing 73 bank accounts, seizing vehicles, and impounding cash and computer equipment.
The operation serves as a reminder of the risks of unregulated crypto investments and the growing threat of scams in the industry.
