• Brazilian Court Ordered the Sale of $1.1 Million in Bitcoin Seized by Federal Police

  • A Brazilian federal court ordered the sale of a $1.1 million bitcoin stash. The sale was carried out by Mercado Bitcoin, the country’s largest regulated exchange. The Federal Police seized bitcoin sold by Tradergroup, a company that allegedly operated as a Ponzi scheme while posing as a cryptocurrency investment firm. This is the first time a Brazilian court order has authorized the sale of bitcoin from seized assets in the country.

    A Brazilian court has ordered the sale of Tradergroup’s seized bitcoins.

    A federal court in Espirito Santo ordered the sale of $1.1 million in bitcoins seized by federal police from Tradergroup, an alleged Ponzi scheme operating under the guise of a cryptocurrency investment company, in 2019. The company was involved in the “Madoff” operation, in which 43 Federal Police officers carried out five searches and seizures in Espirito Santo, Mato Grosso do Sul, and Acre. The proceeds of this sale will be used to pay off some of Tradergroup’s outstanding obligations to former customers.

    The court decided last month that the sale would take place on Mercado Bitcoin, one of the country’s largest cryptocurrency exchanges. The exchange sold nine lots of three bitcoins, with the last lot representing the remaining value, at no less than 2% of the market price. The fiat funds obtained from the sale were then transferred to a court account.

    Alexandre Senra, Federal Public Prosecutor. who ordered the bitcoins to be sold, stated:

    Many Tradergroup victims have filed lawsuits, primarily in state court, seeking reimbursement for their investments, and now a portion of this money will be able to be returned, though not all because the credit sold in [bitcoin] was insufficient to cover the losses.

    Sale of Historical Value

    This is the first time a Brazilian federal court has ordered the sale of a cryptocurrency asset through a commercial exchange. However, this does not imply that Brazilian authorities are lax in their enforcement of cryptocurrency-related crimes. In fact, the country has been one of the most active in the South American cryptocurrency sphere.

    Authorities arrested Claudio Oliveira, also known as the Brazilian “King of Bitcoin,” just last month for his alleged involvement in a $300 million fraud scheme. In addition, more than $33 million was seized by police in a probe that linked unnamed cryptocurrency schemes to money laundering shell companies in the country.

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