Thousands of small investors woke up last July 5 to see live how the money they had entrusted to a well-known ‘trader’ evaporatedn until they are reduced to zero euros. “Unbelievable. Freaking. Almost twenty million have been added,” commented one of them in a Telegram channel enabled for this purpose, around twelve noon. “God, why don’t they speak up?” asked another in a desperate tone. The group grew and the conversation continued for the next few hours, with messages of disappointment (“I’m frankly disappointed”), mentions of the regulator (“if an investment fund loses this money, investigations are opened by the CNMV in Spain”) and disappointment. “In my opinion,” concluded one of those affected, “we’ve been screwed, but well, and we won’t smell a single thing.”
The ‘trader’ who “plumped” these millions—specifically, 17—responds to the name of Leviathan. He operated on Roboforex, an investment platform registered in Belize and not supervised in Spain which, among other services, offers the possibility of ‘copytrading’: an old formula that consists of copying the moves of another expert investor, who at the same time takes a commission for being copied. “An investor’s positions are automatically copied. When this investor wins, the profit is replicated in percentage to the account based on the capital you have entered,” explains IG Spain analyst Diego Marín. “‘Copytrading’ gained some fame with platforms like eToro or Darwinex and then it hasn’t had much of a ‘boom’ until now, which has exploded the pie.”
In the case at hand, the expert is Leviathan. Invest in the foreign exchange market by buying and selling dollars and euros. The minimum deposit to start copying it was, at the beginning, 3000 dollars (right now, equivalent to 3000 euros) and the commission taken was 25% on the profits made every day. According to a screenshot of his profile from then, 2,324 investors came to copy him which he kept updated through a Telegram channel where only he could write. It sent a daily summary with earnings and market commentary. The day of the tragedy remained silent; in the next, he sent an apologetic message (“we are very sorry for the loss we suffered today”), offered a vague explanation (“we are not in a normal situation due to the pandemic, the war, the delay in the rise of rates by the ECB, inflation and investor fear”) and encouraged people to follow. “It’s no use regretting what happened, now it’s time to learn (…) That’s life, when you fall you have to get up (…) This is the only way to success and we will go through it, it’s up to you whether you decide to accompany us or not.” That message disappeared weeks later because he deleted the main Telegram channel.
Leviathan is, according to rumors among those who followed him, a pseudonym under which two or three people who live in Andorra are hiding. No one knows exactly who they are or how to contact them, although profile shots are circulating on Instagram (with their faces and usernames removed) and there are people claiming to be them. Among the investors who lost their money are young Spaniards and Latin Americans. The latter are resigned – “we can’t do anything from here” – while one of the Spaniards promises to give his name and address, upon payment of a “symbolic” amount, to anyone who wants to go look for them.
How did they get here?
Leviathan – or its mysterious members – would be nobody if others hadn’t talked about it. Many of those who went to copy it arrived, explain several affected consulted, after seeing the videos ofAdrián Sáenz, a content creator with over 1.2 million subscribers on YouTube, 160,000 on Instagram and 130,000 on TikTok. What does he do? Sáenz has accumulated four years of uploading videos to social networks about ‘dropshipping’ (selling products directly from the wholesaler), e-commerce, selling on Amazon, poker, renting on Airbnb, investment funds, cryptocurrency mining or NFTs. Any method that can be used to make money is likely to appear on your channel.
Five months ago, Adrián surprised his audience with a video in which he explained how to make money with ‘copytrading’. It is not the only one – YouTube has already been filled with videos of nanos commenting on this investment method – but it is one of the ones that accumulates the most reproductions. The first video was followed by another showing how much he earned in a week, then in a month and finally in two months. Coincidentally, the first three were removed from YouTube and only the last remains public.
Adrián Sáenz – who has not responded to a request for information from El Periódico de España, from the same editorial group as this newspaper – explains in the video how he found out about this business model. “A year ago I was at the gym and a guy came up to me and said: listen, Adrián, I’ve seen one of your YouTube videos and I’d like to recommend that you start copytrading.” According to him, he saw it as very risky and did not invest, something that changed radically ten months later, considering it “a good idea to do in a video”. On this occasion he placed 3,000 euros in three ‘traders’, that is to say, in three systems that replicated three experts. A week later he had lost 14 euros in total. However, one of the three ‘traders’ had made him earn money: a total of 18 euros. This ‘trader’ was the famous Leviathan.
With complete confidence, Sáenz decided to quadruple his bet and invest 5,000 euros. After thirty days it had its fruits, profits in this system that were around 966 euros. Meanwhile, in the first two videos, he placed an affiliate link with which he would receive a commission for all those who register with Roboforex and invest in Leviathan. There is no public trace of this anymore, but this is demonstrated by another ‘YouTuber’ who revealed the tragic investment of Sáenz, Capelo Trading. Sáenz himself also confessed it in the last video on this topic.
With 5,000 euros invested and 1,000 euros earned in one month, Sáenz doubled the investment in Leviatan to 10,000 euros. Sixty-three days after he started copying the three traders, Leviatán offered him the best return, a profit of 7,368 euros. This represents a return of 73.7% on invested capital in just two months, which is incomparable with other financial instruments such as the stock market or fixed income.
The young ‘YouTuber’ had found an aquifer in the desert and let his legion of followers know about it. Despite preaching the virtues of ‘copytrading’ and promoting, via commission, an ‘expert’ to copy, Sáenz included in his videos the addendum “this is not an investment recommendation”, essential to avoid liability. “It’s true that to carry out a financial advisory activity you need certain skills and abilities. If not, they won’t let you register it in the Mercantile Registry,” comments lawyer Juan Carlos Gómez de León, who has brought fraud cases with cryptocurrencies “But to what extent are these recommendations a financial activity? Either it is proven that the ‘youtuber’ knew that these operations would fail or there would be no scam at all.”
Seeing the amazing comeback and “via his gym buddy”, Sáenz contacted Leviatan to ask a series of questions. Among them, what would have to happen for all the money to be lost, to which the ‘expert’ replied that it would have to be something that historically has never happened.
A losing strategy
Leviathan’s investment strategy to win with the Eurodollar exchange it was a martingale, a well-known system in casinos in which in case of loss you bet double. In other words, if red is bet and black falls, double is bet, and so on. In the stock market it is the same: if an asset goes up, it is invested in the downside and if it continues to go up, sell orders are issued.
In the financial markets and the casino this strategy fails when a bad streak goes on and there is no more capital to bet on. It is a strategy with negative mathematical expectation, that is, losing in the long term, which Adrián ended up recognizing after five uploaded videos about ‘copytrading’. What is its positive side? Even if it has to go bankrupt at some point, there’s no telling when that will happen. As long as it doesn’t go bankrupt, it can be very profitable. This was the case with Leviathan, which reached a cumulative return of over 350%, something impossible to achieve even for the best investment funds.
Despite the clouds surrounding the strategy, Leviathan argued that something historical would have to happen for them to fail. This is a lie, since in the past they had several ‘drowdowns’ that almost made them bankrupt. Only between May and June did they accumulate drops that then recovered from 38%, 61% or 73%.
“This type of operation has neither head nor feet. The euro-dollar currency has been falling since 2021. A good investor has known for more than a year that the euro is losing ground against the dollar”, assesses the analyst of GI. “And the martingale really went wrong for them. Is this a common strategy? They are used because they have no idea of the market. I would try to avoid them. Within ‘trading’, currencies are very volatile and it is complicated to make this type of strategy. But in the end there is a lot of marketing that enhances this situation.”
“We have been wavered”
After the huge fall in July two things happened. The first, that small investors continued to complain on Telegram (“they have wavered”) and value taking joint actions. The second, that Leviathan opened a new profile, got new investors (around 600) and went bankrupt again and lost all the money weeks later. Sáenz, for his part, withdrew his money in time and uploaded a video saying that he no longer recommends copytrading or martingale strategies. He announced that he was removing the affiliate links and asked his followers what to do with the 20,000 euros he had won. “What would you like me to do with them? Would you like me to try some kind of business or investment? Let me know in the comments because I’ll be reading,” he asked.
The Jiménez y Lozano law firm contacted those affected and invited them to join a collective claim against Roboforex, the platform: not against the mysterious Leviathan or against the ‘youtuber’ who runs it promote, which collected the commissions while the operation gave results. The office assured El Periódico de España that there were about 400 people interested in claiming and they had to provide them with more information, which they ultimately did not do. There are those affected who are suspicious. “Sounds like a lawyer charging money,” they tell the group.
Lawyer Gómez de León believes that, if presented, the claim will not succeed and young investors will not see a euro back. “I don’t see it. If you agree to copy an investment that you don’t know if it’s good or bad, you’re playing. You’ve been cheated because you’ve lost money,” he concludes. “But what if it goes well, what do you say?”