Bitcoin pyramid schemes wreak havoc on Brazil's 'New Egypt'
CABO FRIO, Brazil (AP) — In April, Brazil’s federal police stormed the helipad of a seaside hotel in Rio de Janeiro state, where they busted two men and a woman loading a chopper with 7 million reais ($1.3 million) in neatly packed bills.
The detainees told police they worked for G.A.S. Consulting & Technology, a cryptocurrency investment firm founded by a former waiter-turned-multimillionaire who is the central figure in what is alleged to be one of Brazil’s biggest-ever pyramid schemes.
Police say the company owned by 38-year-old Glaidson Acácio dos Santos had total transactions worth at least $7 billion ($38 billion reais) from 2015 through mid-2021 as part of a Bitcoin-based Ponzi scheme that promised investors 10% monthly returns.
In hundreds of pages of documents obtained by The Associated Press, federal and state police and prosecutors accuse dos Santos of running a sophisticated racket defrauding thousands of small-scale investors who believed they were getting rich off Bitcoin’s steep appreciation. He is now in a Rio jail awaiting trial on charges including racketeering, financial crimes and ordering the murder and attempted murder of two business competitors. He remains under investigation in the attempted murder of a third competitor.
Dos Santos has repeatedly asserted his innocence. His lawyers didn’t reply to AP requests for comment.
Despite the charges, dos Santos represents an unlikely hero to supporters. Many view him as a modest Black man whose unorthodox Bitcoin business made them wealthy by gaming a financial system they believe is rigged by wealthy white elites.
The case also underscores the fast-growing appetite for cryptocurrencies in Brazil, where years of economic and political crises have made digital currencies an attractive shield...
