The Civil Guard of Spain has arrested a citizen known by the pseudonym CryptoSpain, who is suspected of organizing a large-scale financial pyramid scheme. According to the investigation, he led an international structure that laundered money and attracted funds from citizens under the guise of investments in the Madeira Invest Club.
This is reported by Business • Media
Actions of the Organizers and the Scale of Losses
The losses from the fraudsters’ activities exceeded €260 million, with over 3,000 individuals falling victim to the scam. According to investigators, the Madeira Invest Club began operations at the start of 2023. It positioned itself as a “private investment club” and offered investments in cryptocurrencies, gold, real estate, whiskey, yachts, luxury watches, and premium cars. Investors were promised fixed income and the buyback of acquired assets at a predetermined price.
Formally, the transactions were structured as purchases of digital art objects; however, according to the investigation materials, there was no real economic activity behind these operations. The profits of the first investors were paid exclusively from new contributions, which is a classic Ponzi scheme.
“Contracts were structured as purchases of digital art objects, which the club committed to buy back at a predetermined price. But, according to the investigation, there was no real economic activity — the profits of the first investors were paid from new investors’ contributions.”
International Activities and Previous Fraud Cases
To conceal his activities, the suspect created a network of companies and bank accounts in over ten countries, including Spain, Portugal, the United Kingdom, Albania, the USA, Malaysia, Belgium, Thailand, Hong Kong, and the Dominican Republic. This structure allowed the organizers to deceive thousands of investors and secure access to significant financial flows.
Previously, similar cases of cryptocurrency fraud with many victims and losses reaching €460 million had already been recorded in Spain.