Police say the company owned by 38-year-old Glaidson Acácio dos Santos had total transactions worth at least $7 billion ($38 billion reais) from 2015 through mid-2021 as part of a Bitcoin-based Ponzi scheme that promised investors 10% monthly returns.
In hundreds of pages of documents obtained by The Associated Press, federal and state police and prosecutors accuse dos Santos and his associates of running a sophisticated racket defrauding thousands of small-scale investors who believed they were getting rich off Bitcoin’s steep appreciation. He is now in a Rio jail awaiting trial on charges including racketeering, financial crimes and ordering the murder and attempted murder of two business competitors. He remains under investigation in the attempted murder of a third competitor.
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Bitcoin fervor was particularly keen in Cabo Frio, the resort town of 230,000 where G.A.S. was based. As G.A.S. revenues rose, enriching early adopters, copycat firms sprang up, seeking to cash in on the craze. A wave of cryptocurrency-related violence soon followed.
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Police say dos Santos began trading in Bitcoin after leaving his job as a waiter in 2014. A one-time evangelical preacher in training, he enlisted clients from the Universal Church of the Kingdom of God, Brazil’s largest neo-Pentecostal group, who earned a referral fee for bringing in fresh recruits and kicking back money to G.A.S., police documents say.
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As Bitcoin fever grew, dos Santos was fast becoming a celebrity in Cabo Frio.
“If he wanted to run for mayor, governor even, he’d win,” said Gilson Silva do Carmo, 52, one of dos Santos’ alleged victims.
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[...] many early G.A.S. investors who had been receiving regular monthly payments refused to believe dos Santos did anything illegal.
After his arrest, a crowd gathered outside broadcaster TV Globo in Rio de Janeiro to protest coverage of the alleged racket. In October, scores of supporters blocked the street outside a federal courthouse in Rio, demanding his freedom.
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