Brazil: $193 Million ‘Crypto Pyramid’ Firm Declared Bankrupt

Indeal, the Brazilian company behind a suspected crypto pyramid scheme worth some $193 million, has declared bankruptcy.

The firm was at the heart of a major police operation back in May 2019. The police dubbed their operation Operation Egypt and worked in conjunction with the nation’s tax agency to arrest several Indeal-linked individuals. Officers searched 25 addresses and confisctaed items including precious stones and luxury cars.

At the time, police stated that between 23,000 and 55,000 investors had put their funds into the scheme. Investors stated they had been promised 15% payouts within just four weeks of initial investment.

But the authorities claimed that the firm had been operating without the required permits from the Central Bank and the Brazilian Securities Commission (CVM).

Suspected Crypto Pyramid Operator: Why Did it Declare Bankruptcy?

The firm had attempted to stay afloat in the wake of the raids. But it suffered further blows when the Federal Court authorized the sale of much of the Bitcoin (BTC) seized in the raids. The court won the right to auction BTC 3,537.21 – and use the funds to reimburse victims.

Late last year, the United States Department of Justice complied with a Brazilian government request to seize $25.7 million worth of crypto from US-based wallets.

And this appears to have been the final straw for Indeal. The Brazilian-language media outlet Criptofacil reported that the Regional Business Court of the District of Novo Hamburgo, in Rio Grande do Sul, officially declared the company bankrupt.

The move means no new financial claims can be made against the company. But now that bankruptcy has been finalized, the court has taken control of Indeal’s remaining assets – including “real estate, vehicles, and financial assets.”

Indeal will also have to fight lawsuits filed before it declared bankruptcy.

Last year, police shut down another alleged crypto pyramid scheme involving a token named Mindexcoin. They claimed the alleged scheme may have amassed $769 million worth of investment.

The police think a high-profile individual nicknamed the “Bitcoin Sheikh” was the project’s mastermind.