In a recent revelation, Indeal, a Brazilian company behind a suspected crypto pyramid scheme worth more than $193 million, has declared bankruptcy.
Sources reveal that in May 2019, the firm was the heart of a major police operation. The police dubbed their operation named “Operation Egypt” and worked in cooperation with the nation’s tax agency to arrest several Indeal-linked individuals.
The officers searched 25 addresses and seized precious stones and luxury cars. At that time, police stated that between 23,000 and 55,000 investors had put their funds into the bogus scheme. Apparently, investors stated they had been promised 15% payouts from the firm within just four weeks of the first investment.
The authorities claim that the firm had been operating without the required permits from the central bank of Brazil and the Brazilian Securities Commission (CVM). The firm had attempted to stay afloat in the wake of the raids but suffered when the Federal Court authorized the sale of the large chunk of Bitcoins seized. The court won the right to auction 3,537.21 Bitcoins and use the funds gained to compensate victims.
Late last year, the US Department of Justice adhered to a request from the Brazilian government to seize $25.7 million worth of crypto from US-based wallets.
Sources reveal that this appears to have been the final straw for Indeal. A Brazilian media outlet reported that the Regional Business Court of the District of Novo Hamburgo, in Rio Grande do Sul, officially declared the company bankrupt.
Hence, this move implies that no new financial claims can be made against the company, and now with finalized bankruptcy, the court has taken control of the company’s remaining assets, including “real estate, vehicles, and financial assets.”
Indeal will also have to fight lawsuits filed before it declares bankruptcy. Last year, police shut down another alleged crypto pyramid scheme involving a token named Mindexcoin. They claimed the scheme may have amassed $769 million worth of investment.
The police believe that a high-profile individual nicknamed the “Bitcoin Sheikh” was the project’s mastermind.
Brazil has been one of the nations leading in adopting crypto assets. As per a report published by the Brazilian tax authority (RBF) in December, the companies in the country have become more progressive towards adopting crypto as a part of their treasuries. Data suggested that almost 42,000 companies invested in cryptocurrency during October. The October figures broke September records wherein 40,161 companies had invested in crypto. Interestingly, the number of individuals who purchased crypto during the same period dropped to 1,265,818 from 1.5 million in September.
The country has been progressing in its crypto regulations as well. In November, the Brazilian Chamber of Deputies approved a bill governing the cryptocurrency business on Tuesday. The measure, passed by the Senate in April but stalled in the Chamber of Deputies, now needs the consent of President Lula to become law.