Federal Police (PF) launched Operation Fantasos

Federal Police (PF) launched Operation Fantasos on Wednesday (30) to dismantle an international pyramid scheme that defrauded about 100,000 people in several countries and collected nearly R$ 1.6 billion in less than two years. The main targets of the action are in Petrópolis, in the Serrana Region, and Angra dos Reis, on Rio de Janeiro’s Costa Verde, where 11 search and seizure warrants are being executed.

The scam, named Trade Coin Club, was commanded by Douver Torres Braga, 48, who was arrested in February in Switzerland by Interpol and later extradited to the United States. Braga is accused of defrauding over 100,000 investors in countries such as Brazil, Portugal, Finland, and South Korea.

In Brazil, at least 2,500 investors were affected by the scheme, which operated with a multilevel marketing program and promised daily returns of 0.35% through an alleged cryptocurrency trading robot. However, investigations by the U.S. Securities and Exchange Commission (SEC) revealed that the system functioned as a classic Ponzi scheme.

The Trade Coin Club paid for requested withdrawals solely with deposits made by other investors, with no connection to actual cryptocurrency market trading. The promise of 0.35% daily returns was also an unrealized claim.

According to the SEC, Braga’s actions defrauded investors out of more than 8,396 bitcoins, which at the time were valued at over US$ 55 million. If converted at current value, considering Bitcoin’s appreciation in recent years, the amount would exceed R$ 1.75 billion.

A staggering sum considering that the Trade Coin Club collected over 82,000 bitcoins between 2016 and 2018, an amount that, at the time, was equivalent to about US$ 295 million, or R$ 987 million at the current rate.

The Federal Court ordered the attachment of assets and funds up to R$ 1.6 billion, an amount that corresponds to the total collected by the criminal group. The objective of Operation Fantasos is to collect additional evidence, identify other involved parties, and recover assets acquired with the scheme’s profits.

The operation also had the support of agencies from other countries, including the FBI, Homeland Security Investigations (HSI), and the Internal Revenue Service Criminal Investigation (IRS-CI).

Trade Coin Club: How the scam worked

Created and led by Douver Torres Braga, the Trade Coin Club began operating in 2016, aiming to capitalize on the growing global interest in cryptocurrencies. Promoted as a revolutionary investment opportunity, the scheme attracted victims with the promise of an artificial intelligence robot capable of performing “millions of microtransactions per second.”

This system would guarantee consistent profits, with minimum returns of 0.35% per day, equivalent to about 11% per month, according to the scheme’s literature. However, investigations conducted by the U.S. Securities and Exchange Commission (SEC) revealed that the robot never existed.

Instead, investors’ funds were diverted to Braga’s personal accounts and to a network of promoters who helped expand the scheme. Between 2016 and 2018, the Trade Coin Club collected over 82,000 bitcoins, which, at the time, were worth US$295 million.

Conventing to current value, the amount would exceed R$1.75 billion, considering Bitcoin’s appreciation in recent years. These funds were used to purchase real estate, vehicles, and other luxury goods, while investors faced difficulties withdrawing their capital.

The scheme, which operated as a classic Ponzi scheme, paid for requested withdrawals exclusively with deposits made by other investors, with no connection to actual cryptocurrency market trading.

The promise of 0.35% fixed daily returns was also a key attraction. Investors were told that the alleged trading robot operated with high precision, capitalizing on small market fluctuations to generate consistent profits.

To bolster credibility, the scheme’s leaders presented falsified reports and dashboards that simulated gains, creating the illusion of a sophisticated and reliable system.

However, according to the SEC, the Trade Coin Club operated without registering the securities it sold or the members packages that functioned as investment contracts.

The lack of transparency and absence of official records were clear signs of irregularity, but many investors, lured by the promise of quick profits, overlooked these warnings.

Global impact

The Trade Coin Club's reach was vast, defrauding over 100,000 investors across multiple countries. The scheme exploited the cryptocurrency craze at a time of minimal regulation in the sector.

In addition to Brazil, where at least 2,500 investors were affected, authorities in Portugal, Finland, and South Korea also reported victims and collaborated with U