Spanish Authorities Dismantle 400 BTC Cryptocurrency Pyramid Scam, Luring Victims from 36 Countries

Massive Crypto Scam Uncovered in Spain, Over 30 Million Euros Stolen

Spanish authorities have uncovered one of the largest cryptocurrency pyramid scams in the country’s history, with an estimated 32.6 million euros lost by over 3,600 victims.

This intricate fraud scheme, operating in Málaga, Madrid, and Murcia, preyed on individuals who were often unfamiliar with cryptocurrency.

It led to the arrests of eight individuals, including the mastermind behind the operation, a computer programmer detained in Málaga.

Translation:

🚩 An organization dedicated to the commission of #fraudes in investments in #criptomonedas was dismantled in a simultaneous operation in #Málaga , #Murcia and #Madrid

👉 They had a platform that offered an investment plan with a high profitability in exchange for the leasing of bitcoins for 12 months.

👉 The project hid a pyramid scheme

👉 8 #detenidos and it is estimated that the fraud amounts to about 400 BTC, which taking into account its current price would be around 30,000,000 euros

Crypto Fraud Victims Across 36 Countries

The police investigation, launched in 2022, revealed that the scam spanned multiple countries, affecting victims from as many as 36 nations.

Over 2,700 of those defrauded were residents of Spain, with the rest scattered across the globe.

The fraudsters used a seemingly legitimate online platform to attract investors, offering them high returns in exchange for Bitcoin investments.

The victims were encouraged to invest large sums, often with promises of guaranteed returns that seemed too good to be true.

Web Design Experts and Marketers Behind The Deception

The operation’s criminal network included marketing professionals and web design experts, all instrumental in creating a convincing online presence that lured in unsuspecting investors.

Police stated that the group used deceptive tactics on social media and various websites to promote fake investment plans.

The scammers made the process appear easy for investors, promising simple ways to exchange euros for Bitcoin.

Source: pexels

In some cases, victims were convinced to surrender control of their devices to the fraudsters, who then made transactions on their behalf, gaining access to their personal and banking data.

False Promises and Fraudulent Investment Plans

Police described the fraud as a classic pyramid scheme where initial returns were paid using funds from new investors, delaying withdrawals and creating obstacles for those trying to access their money.

One officer told news agency EFE,

"Victims were promised returns of 40% per month and up to 300% per year."

The scammers’ real goal was to secure funds by stringing along investors with fabricated promises and eventual refusal to let them withdraw.

Authorities Seize Assets and Freeze Accounts

During the operation, Spanish authorities froze 73 bank accounts linked to the scam and seized assets including cars, motorcycles, and computers.

A total of 400 bitcoins, currently valued at around 37.2 million euros, were believed to have been accumulated by the fraudsters through their deceptive activities.

In addition to these digital assets, the perpetrators also created a worthless cryptocurrency that they used to further deceive victims, leading them to believe they were investing in something legitimate.

Close up of Spanish National Police vehicle

A Community-based Approach to Building Trust

One of the scam's most disturbing tactics was its ability to blend into communities, building trust before exploiting individuals.

In a particularly striking example, one of the fraudsters infiltrated a local football club in Málaga.

He integrated himself into the social fabric of the group, attending events and building personal relationships with players.

Eventually, he offered them investment opportunities, initially using funds from new victims to pay “returns.”

An officer, who is close to the investigation, shared,

"Some victims lost thousands, but others only invested small amounts."

The fraudster’s tactics extended beyond this club, and it was later revealed that the same individual, along with his family, had been involved in similar scams in Argentina, where they were reportedly wanted by the authorities.

Authorities are continuing their investigation, working to identify more victims and potential accomplices in the scam.

The scale of the operation highlights the growing threat posed by fraudulent cryptocurrency schemes, especially for those without a full understanding of how such investments work.