Ponzi Scheme, a fraudulent scam promised about high returns with little risk for investors. And due to this scheme, Brazilian mining company is facing accusations.
Brazil alone has 380 fintech companies. It has some of the biggest growth in Latin America, related to these industries. A resech by Inter-American bank has conveyed about the growing fintech startups company in Brazil. The advancement in technologies and increased usage of mobile phones and internet has lead to this fintech renaissance.
Brazilian mining company Minerword, has claimed that due to this fraudulent scheme, this company has been in the loss and now it do not have enough bitcoins so that they could compensate the traders that have invested their possessions in the company.
Speaking to this matter court has ordered the company to pay back the investors using the remaining funds, and financial resources. However, Minerworld told the court it could not make payments because remaining funds were spent on keeping operations running and to terminate contracts with service providers. There are almost 50,000 investors that has been affected due to Ponzi Scheme. Brazil’s justice system is currently prosecuting Minerworld for operating as a ponzi scheme.
Minerworld has asked to publish statement of accounts for the last four months. This will show all the income and expense of the company and will help to make this process more transparent. On December 3rd, after released of this news, the ongoing operations of crypto mining have been affected to a great extent over the world. As the current market of virtual currency is already low since the beginning of the year. The bitcoin hash rates has been declined upto 50 percent since august. Many companies has turned off there hardware mining because of loss.
According to few sources the funds remaining from Minerworld were spent to “maintain their minimum functioning, resignation of officials and contractual terminations with service providers” The company confutations this by asserting that they operate their business as a multi-level marketing (MLM) practice by offering investors 100% returns, fancy cars and holidays.
Many peoples have signaled about the Pnzi Scheme in this company earlier. Many people claimed that it uses Pyramid scheme. It had similar model for a multi-level business. However it was just a suspection, According to CryptoNoticas, Minerworld has confirmed that they are not a pyramid scheme. This authority was suspected because it promised higher returns on investments, which also included many prizes such as imported vehicles and international trips. Minerworld has claimed that they have lost 851 bitcoins in October 2017, It was due to a phishing attack during Poloneix exchange. According to several sources this attack was not considered as a theft.
Apart from these Minerworld also faces accusitions from authorities like Paraguay. Infact this company has been considered as a fraud by Praaguayan authorities.