As reported last week by the Brazilian TV news channel Record, Brazil seems to be under attack from multiple cryptocurrency scams.

In the news piece, the team investigated a company that has faced allegations of being a financial pyramid scheme.

The report also focused on several investors who lost everything in fraudulent companies after being tempted in by the promise of easy money.

Brazil is facing a wave of scams

Victim testimonials given to Record about financial pyramids show a tendency to focus on cryptocurrencies like Bitcoin. Presenter Eduardo Ribeiro points out that this relationship between cryptocurrencies and financial pyramids is a result of the “age of technology”.

One interview highlights an investor who bought Bitcoins to invest in the HPX platform. However, when the man tried to withdraw his funds, he could not complete the process.

According to the piece, HPX’s business served to illustrate cases of financial pyramids occurring in Brazil. It pointed out that up to 50 companies are currently being investigated by a special task force targeting potential scams. This task force includes the Federal Police, the Public Prosecution Service, and the Treasury Attorney.

One investor interviewed in the story says financial pyramids are widely publicised in the country through messaging applications such as WhatsApp and video platforms like YouTube in an attempt to dupe unsuspecting victims.

Millions in losses accounted for already

As recently reported by Agencia Publica (AP), One Life – the parent company of OneCoin – sold more than 2.5 million euros in fake cryptocurrencies to Brazilians between 2015 and 2016.

The OneCoin cryptocurrency, however, has yet to show up on any cryptocurrency exchanges – contrary to its promises to buyers.

The company is now under international investigation for bank fraud, and the collective action taken by US victims has led to the arrest of a number of One Life associates.

Founded in Bulgaria in 2014, the company rode the cryptocurrency wave. Within a year, it already had customers in more than 200 countries – including Brazil, where it began operating in January 2015. Today, One Life claims to have more than 3.5 million customers worldwide.

The report claims that other alleged financial pyramids such as FX Trading and Atlas Quantum are also being investigated.

EU countries are also exposed to scams

It has also recently been reported that the Public Prosecutor of Portugal is investigating a major potential pyramid scam in the country.

In Portugal, cryptocurrency fraud is becoming increasingly common. The problem has become so prevalent that some of the country’s largest financial content portals have already started publishing articles to help their users stay away from common Bitcoin schemes, including pyramid schemes and social media scams.

In Portugal, it was declared this year that cryptocurrency transactions are tax free, which could be the reason behind the increased number of cryptocurrency-related scams.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.