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Bitcoin pyramid schemes devastate Brazil’s ‘New Egypt’

Two men and a woman were arrested in April while loading a chopper with 7 million reais ($1.3 million) in neatly wrapped bills at the helipad of a boutique seaside hotel in Rio de Janeiro state.

The inmates claimed that they work for G.A.S. Consulting & Technology, a cryptocurrency investment firm formed by a former waiter-turned-multimillionaire who is the central figure in one of Brazil’s largest-ever pyramid schemes.

Glaidson Acácio dos Santos’ company, according to police, had total transactions worth at least $7 billion ($38 billion reais) between 2015 and mid-2021 as part of a Bitcoin-based Ponzi scam that promised investors 10 percent monthly returns.

In hundreds of pages of documents obtained by The Associated Press, federal and state police and prosecutors accuse dos Santos and his friends of conducting a sophisticated scheme that defrauded thousands of small-scale investors who thought they were making a fortune from Bitcoin’s rapid rise. He is now being held in a Rio de Janeiro jail awaiting trial on charges that include racketeering, financial crimes, and ordering the murder and attempted murder of two business rivals. He is still being investigated for the attempted murder of a third contender.

Despite the numerous charges against him, dos Santos is regarded as an unlikely hero by his ardent admirers. Many see him as a modest Black man whose unconventional Bitcoin business made them wealthy by manipulating a financial system rigged by wealthy white elites.

The case also highlights the rapidly expanding interest for cryptocurrencies in Brazil, where years of economic and political problems have made digital currencies an appealing hedge against Brazilian real loss and double-digit inflation.

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