Spanish bitcoin ponzi scheme defrauds investors $1 billion

bitcoin ponzi scheme

In Spain, the authorities investigate an alleged bitcoin ponzi scheme that has impacted up to 32,000 families. As per the provisional results of the investigation against the Arbistar bitcoin trading platform, about $1 billion of investor funds are missing.

The Arbistar bitcoin trading platform’s trouble began when the firm froze all the accounts suddenly last month. During the time, the platform’s officials claimed a trading bot malfunction has caused the system to pay excess profits. The firm outlined that the trading bot malfunction went unnoticed for an extended period, leaving the investment firm in a monetary predicament through an official statement.

Spanish law enforcement investigating alleged bitcoin ponzi scheme

According to domestic media outlets, Tenerife law enforcement authorities, the same location as Arbistar’s main office, have already launched investigations against the alleged bitcoin ponzi scheme. The authorities aim to find out the location of the misplaced $1 billion client money. In the meantime, some of the victims of the disappeared funds suggest that Arbistar is a pyramid scheme.

The founder and CEO of Arbistar, Santiago Fuentes, has strongly dismissed such claims while defending the decision to freeze the accounts. He allegedly stated:

“It is just a computer error that we have to settle, liquidate, and continue with our businesses.”

Notably, after his trial and discharge against a different scam, Fuentes went on to accept that the decision to freeze the investor accounts has impacted more than 30,000 families in Spain. Fuentes also confirmed that he is hiding due to security reasons at an unknown place in Tenerife, Spain. He denied the allegations that he has vanished.

When quizzed on the total BTC missing from investor accounts, Fuente disputes and claims the amount is way lower than $1 billion. Instead, he suggests the amount is about 10,000 BTC equating to over $100 million.

A twist of events

In other developments, a blockchain analytics firm, Whitestream, revealed vast fund transfers from Arbistar’s bitcoin ponzi scheme wallets to crypto exchange Coinbase and Wirex, which happened back in February. The blockchain firm provides visual evidence of withdrawals directly after investor fundraising in the form of Bitinfocharts.

Arnold Kirimi

Arnold Kirimi

Arnold is a crypto and blockchain enthusiast. A communications expert with interest in hard-hitting journalism, he is always on the hunt for the latest events in the cryptocurrency world. He is inspired by what Bill Gates said, “Bitcoin is a technological tour de force.”

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