A federal court in Espirito Santo ordered the sale of $1.1 million in bitcoins confiscated by federal police from Tradergroup, an accused Ponzi scam operating under the guise of a cryptocurrency investment company, in 2019. The corporation was involved in the “Madoff” operation, in which 43 Federal Police officers carried out five search and seizure orders in Espirito Santo, Mato Grosso do Sul, and Acre. The revenues of this sale will be used to pay off some of Tradergroup’s outstanding commitments to previous customers.
The court ordered last month that the sale will take place on Mercado Bitcoin, one of the country’s largest cryptocurrency exchanges. The exchange sold nine lots of three bitcoins, with the last lot representing the remaining value, for no less than 2% of the market price. The fiat funds obtained from the transaction were then transferred to a court account.
Alexandre Senra, Federal Public Prosecutor. who ordered the bitcoins to be sold, stated:
“There are many victims of Tradergroup with lawsuits, mainly in the State Court, asking for the money invested back, and now a portion of this money will be able to be returned, not all because the credit sold in [bitcoin] was not enough to reimburse the losses.”
This is the first time a Brazilian federal court has ordered the sale of a cryptocurrency asset through a commercial exchange. However, this does not imply that Brazilian authorities are weak in their enforcement of cryptocurrency-related offences. In reality, the country has been one of the most active in the South American bitcoin industry.
Authorities arrested Claudio Oliveira, commonly known as the Brazilian “King of Bitcoin,” just last month for his suspected involvement in a $300 million fraud scam. In addition, more than $33 million was seized by authorities in a probe that linked unknown cryptocurrency schemes to money laundering shell firms in the country.