Mastermind behind $300M crypto pyramid scheme arrested in Spain
Spanish authorities have arrested the alleged ringleader of a crypto pyramid scheme that conned more than 3,000 victims out of €260 million ($300 million) with the promise of 20% annual returns.
Álvaro Romillo Castillo, who goes by the pseudonym “Cryptospain,” was arrested on Thursday and denied bail due to him being considered a flight risk ahead of a scheduled court appearance on Friday.
Castillo allegedly led the Madeira Invest Club, a so-called “private investment club” that offered investors opportunities in real estate, expensive whiskey, high-end vehicles, yachts, gold, and crypto while dangling the carrot of guaranteed returns.
As reported by the Ministry of the Interior, investor contributions were formalized through digital artwork purchase agreements, which the club promised to repurchase within a set time using pre-established profits.
However, the investigation by the Civil Guard revealed that Madeira Invest Club was just a pyramid scheme that used the profits of the earliest participants to pay newcomers.
Castillo helped far-right politician with crypto
Castillo has also reportedly confessed to paying €100,000 ($115,000) to finance the 2024 election campaign of right-wing politician Luis “Alvise” Pérez Fernández.
Spain’s Public Prosecutor’s Office demanded an investigation into the MEP and alleged Fernández had reached out to Castillo for advice on setting up wallets for “anonymous donations from third parties outside of any financial control by the authorities.”
Read more: Spain can soon settle tax debts by seizing crypto
Fernández has garnered a large social media following among the Right and, in October, officially launched the anti-immigration “Se Acabo La Fiesta” party.
He previously won three seats in last year’s elections.
The office is also seeking to bring Romillo under the scope of its investigation into Fernández.
Castillo says he’s returned most of the money
Castillo told a court hearing today that he has returned the funds to most of the scheme’s 2,700 victims, however, the Ministry of the Interior estimates that more than 3,000 people were affected.
The enterprise involved shell companies and bank accounts across the globe, including entities in the UK, US, Singapore, Albania, Portugal, and Thailand. Castillo claims, however, that he has no “formal training” in finance and was trying to avoid taxes in Spain.
Before his arrest, Spain’s tax agency reportedly detected that he had been moving up to €29 million ($33 million) overseas.
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