Brazilian courts have been targeting and shutting down illegal cryptocurrency “investment” firms in a bid to improve the security and legitimacy of the crypto environment in the country.
Last week, it was reported by Brazilian news outlet Folha de São Paulo that economist Fernando Ulrich, the current chief economist at brokerage firm XDEX, will join the CMB’s (the Brazilian mint) board of directors.
Ulrich has been an avid proponent of Bitcoin and other cryptocurrencies and has been pushing for better regulation around these assets for some time. Moreover, he has skin in the game by being a partner of a cryptocurrency investing firm.
Both the CMB and Brazilian authorities now seem to be pushing for increased oversight over cryptocurrency projects.
Brazilian authorities tackle alleged Bitcoin scams
Last week alone, three alleged cryptocurrency scams were brought to justice by Brazilian authorities.
The Brazilian court has ordered two alleged Bitcoin financial pyramid schemes to repay the amounts invested by clients. The companies in question are ValourInvest and Imperium Trader.
In the case of Imperium Trader, the plaintiff claims to have invested 5,000 reais but only managed to recover around one-fifth of the total amount invested. The judge upheld the case.
In the case of ValourInvest, the client had allegedly invested around 4,545 Bitcoins. After the court ordered the company to refund the amount, the company filed an application for relief to overturn the court decision. However, the original ruling was upheld.
Both companies claim to employ investors carrying out operations in the cryptocurrency market, however neither company is authorised by the Brazilian Securities Commission (CVM).
Additionally, Brazilian courts also ordered Unick Forex, another alleged Bitcoin investment pyramid scheme, to refund a client who was unable to complete a withdrawal on the company’s platform.
Unick claimed to pay up to 3% per day on the amount invested by investors, supposedly by issuing operations in the forex market with Bitcoin.
Fewer scams means higher legitimacy
As you may know, it is illegal in most jurisdictions to promise a certain fixed payout, especially when markets are as volatile as cryptocurrencies are.
Also, the less “scammy” projects there are, the more people will focus on the good stuff instead of just giving money away to random companies because they promise incredibly high returns.
We shouldn’t forget that Brazil is a market with over 200 million people and counting.
If Bitcoin becomes a legitimate investment and people start making serious cash just by hoarding and hodling the cryptocurrency, BTC could really offer assistance to struggling Latin American countries.
In the past, Brazil has suffered numerous times with currency hyperinflation, much like Argentina or Venezuela.
By clearing the cryptocurrency industry of any potential scams, people will have increased confidence in the field, and the probability of making a good investment increases substantially.