[News] The shadow of fraud dims cryptocurrencies

[SougarLord]

 

 

 

The rush that cryptocurrencies have been experiencing since last year is leaving a millionaire hangover for thousands of small investors. In recent months, the 'brokers' of dubious qualification have multiplied which, with the bait of the revaluation of digital currencies such as bitcoin, offer great returns in exchange for large investments. A high-risk business that, on some occasions, hides gigantic fraud.

 

Justice is already following the trail of these cases. Both nationally and internationally. Thus, the Turkish Prosecutor's Office on Friday opened an investigation for "scam" of billions against a po[CENSORED]r cryptocurrency exchange, Thodex, which could have attracted some 390,000 investors.

 

In Spain, this same week it was learned that the judge of the National Court, José Luis Calama, has accepted the inhibition of a court in Arona (Tenerife) to investigate a pyramid scheme related to investments in digital currencies through the company Arbistar 2.0 . A case that would initially have 1,127 affected - but this number could go up to 32,000, according to the bank accounts involved - and an economic loss of more than 41 million euros.

 

But this is not the only case that has reached the Hearing. More than 300 people have filed a macro-complaint against the broker Javier Biosca for the alleged scam of more than 250 million euros through investments in digital currencies. A cause that, according to the lawyer in charge of the case, Emilia Zaballos, could reach 3,000 million euros.

 

The lawyer explains, in statements to this newspaper, that "up to 4,000 investors, both Spanish and other places such as Latin America, have been affected by the plot of Javier Biosca", which began by offering returns close to 34% to its clients. "At first he complied with the agreement, but in the autumn his operations got out of control and he began to delay in payments and even falsify bank documents," she highlights.

 

The investor, whose business is considered a financial bar by the CNMV, has been missing since November.

 

Zaballos, who also chairs the Association of People Affected by Investments in Cryptocurrencies (AAIC), believes that this case perfectly reflects the fever that exists on the internet for cryptocurrencies such as bitcoin. "Well managed, it can become a profitable investment, the problem is that many scammers take advantage of the state of need in which many users have been left by the pandemic to offer products of a very high risk without the necessary knowledge." "There will be more complaints like this in the coming months," the lawyer abounds.

 

Bitcoin has been one of the main assets during the pandemic. In the last year it has multiplied its value by seven, which has hooked certain internet users to the currency, especially a young audience that was already tempted by online sports betting.

 

On this particular path to the top, bitcoin has also hit it hard; it has become even more volatile. So far in April it has yielded almost 20% of its value. Meanwhile, Ethereum, the other major cryptocurrency, dropped more than 10% on Friday. Different analysts also warn that the downward streak will intensify during the next sessions.

 

The CNMV has been tracking this digital money for years. And while he acknowledges that dubious practices already existed in the past, he also admits that these have increased sharply with the arrival of the pandemic. “We have detected an increase in offers and advertising. In recent months, a good part of the warnings we have issued are related to these products ”, explain sources from the market supervisor.

 

The Internet has become a haven for this type of fraud. The network allows you to quickly close and open web pages, and it is also not necessary for the company in charge of these matters to be located in Spain. This makes these types of scams more difficult to detect. "Before, telephone fraud proliferated, now it is through the internet," they explain from the CNMV.

 

Restricted advertising

Faced with this increase in investments in cryptocurrencies, the Government approved in March a modification of the securities market law by which it orders the CNMV to regulate the advertising of these assets.

 

Before drafting the corresponding circular, the body led by Rodrigo Buenaventura has launched a public consultation to the sector from which it has obtained 18 responses that it is analyzing. Among the measures that are considered, they explain from the CNMV, are some such as that this advertising has the same conditions as regulated products or that they use clear language and the option of exorbitant returns remains in the background. Warnings are also contemplated, such as including a message similar to that used in the advertising of medicines, or that mass campaigns have to have prior authorization.

 

"A regulation is necessary to protect the small investor and it would be convenient for different courts to specialize in this type of cases," highlights Zaballos, who also demands that the CNMV act ex officio in these plots.