In a significant crackdown on cryptocurrency fraud, a Brazilian federal court has sentenced three executives of the defunct crypto firm Braiscompany to a combined 171 years in prison.

The trio orchestrated one of Brazil's largest Ponzi schemes, defrauding approximately 20,000 investors of over $190 million.

Mastermind Receives Record Sentence

Federal Judge Vinícius Costa Vidor identified Joel Ferreira de Souza as the scheme's mastermind. De Souza was convicted of operating an unlicensed financial institution and laundering millions through shell companies and unregulated crypto wallets.

He received a record 128-year prison sentence. His associates, Gesana Rayane Silva and Victor Augusto Veronez de Souza, were sentenced to 27 and 15 years, respectively, for their roles in managing finances and facilitating fraudulent transactions.

Earlier, in February 2024, Braiscompany founders Antônio Inácio da Silva Neto and Fabrícia Farias Campos were sentenced to 88 years and 7 months and 61 years and 11 months, respectively.

The couple had been on the run for over a year before being apprehended in Argentina, where they had been living under false identities. They are currently under house arrest, awaiting extradition to Brazil.

How did the Braiscompany scam operated?

Braiscompany attracted investors by promising monthly returns of up to 8% on cryptocurrency deposits locked in for a year.

The company bolstered its credibility through polished marketing materials and claims of partnerships with prominent crypto entities.

However, in late 2022, the firm began delaying payments, and by January 2023, payouts had nearly ceased.

Investigations revealed that Braiscompany operated an informal financial network, utilizing high-commission schemes and unregulated crypto wallets to move funds and evade detection.

The court has ordered the seizure of assets totaling R$36 million (approximately $6.2 million). However, it remains uncertain how much victims will ultimately recover. Legal representatives for the victims have urged prompt civil claims to prevent the funds from being absorbed by the state.

This case underscores the growing need for regulatory oversight in the cryptocurrency sector and serves as a cautionary tale for investors enticed by promises of high returns without adequate safeguards.