CVM fines R$48 million ‘King of Bitcoin’, Bitcoin Banco Group and others involved in scheme By CriptoFácil

2023-10-04 13:10:10

© Reuters. CVM fines R$48 million ‘King of Bitcoin’, Bitcoin Banco Group and others involved in scheme

CriptoFácil – The Securities and Exchange Commission (CVM) judged on Tuesday (03) the self-proclaimed “King of”, Cláudio José de Oliveira, his company Bitcurrency Moedas Digitais (Grupo Bitcoin Banco – GBB), the partner CLO Participações e Investimentos and its CEO Johnny Pablo Santos for an irregular public offering in the capital market.

After analyzing the case and following the vote of rapporteur João Accioly, the CVM Board unanimously decided to fine Cláudio R$9.25 million for the accusation made. Johnny Pablo Santos, as CEO of Bitcurrency, will have to pay a fine of R$1.85 million.

Meanwhile, Bitcurrency and CLO Participações SA were fined R$18.5 million each. Therefore, the total value of the fines applied by the CVM for the irregular public offering on the capital market was R$48.1 million.

Trial of the ‘Bitcoin King’

According to the judgment document, the CVM Securities Registration Superintendence initiated an Administrative Sanctioning Process (PAS) to determine the possible responsibility of the four mentioned for carrying out an offering of securities without obtaining the registration provided for by law.

The investigation began in 2019 to analyze reports and complaints filed with the CVM between May and August of that year, reporting the activities of the Bitcoin Banco Group (GBB) in the market, through the NegocieCoins business platform and others.

The complaints highlighted problems with making withdrawals, the disappearance of invested capital and the lack of responses from companies.

Based on the complaints, the Investor Protection and Guidance Superintendency verified the alleged existence of a fraudulent scheme based on an “infinite arbitration” mechanism between the exchanges NegocieCoins and TemBTC, members of the GBB.

Furthermore, the CVM identified the existence of “Products with investments in Bitcoin” offered by GBB over the internet. The promise was “compensation of 1% per month and an additional one, for performance between 2% and 7%”, divided between the investor and GBB.

Also read: Artificial intelligence predicts Bitcoin price for October 31, 2023

GBB defense

The company responded to the CVM, saying that none of the companies offered investments, but rather “legal businesses with different loan terms and forms of compensation”, among other allegations.

The CVM, however, concluded that the offer of “Products with investments in Bitcoin” was a Collective Investment Contract without due registration. Therefore, the municipality issued a “stop order” against the company. In other words, he ordered the investment offer to be stopped.

The municipality attributed responsibility for the infractions to Bitcurrency, its partners Cláudio Oliveira and CLO Participações, and its director Johnny Santos.

“In view of the above, the Prosecution proposed holding Bitcurrency and CLO Participações liable, as offerors, Cláudio Oliveira, as administrator of Bitcurrency and CLO Participações, and Johnny Santos, as administrator of Bitcurrency, for carrying out an offering of securities without obtaining the expected registration,” said the CVM.

About the Bitcoin Banco Group

As mentioned, the “King of Bitcoin” promised high returns through investments in GBB. But after the investigations began, Claudio obtained a decision in favor of a request for judicial recovery in Curitiba. The process suspended all enforcement actions filed against the group’s companies.

However, it was found that the group did not fulfill the obligations determined by the judicial recovery decree. Furthermore, GBB continued to offer collective investment contracts without authorization from the CVM.

Then, in July 2021, the PF launched an operation that culminated in the arrest of Cláudio, his wife and three other people. With the exception of Cláudio, all suspects were subsequently released. A few days later, the court declared GBB bankrupt.

In April last year, Cláudio José de Oliveira was sentenced to 8 years and 6 months in closed prison. In addition, he had to pay a fine for embezzlement and crimes against the financial system.

By CriptoFácil