The National Court prosecutes seven defendants for fraud of 92 million with cryptocurrencies: “They sold smoke”

“They sold smoke; it was a simulation and a fiction.” So the picture sums up the judge National audience José Luis Calama prosecution of seven alleged members of a criminal conspiracy that is through the platform Arbistar commercialization of cryptocurrencies, defrauded 32,000 investors of more than 92 million euros between May 2019 and September 2020.

In his 22-page order, the judge proposed to try the leader of the conspiracy, Santiago Fuentes Jover, and six others for the crimes criminal organization and fraud and requires them to pay a joint bond that will see them face a possible fine of €123 million (the amount allegedly defrauded plus an additional third, as determined by law).

In his resolution, Calama explains how through the Arbistar website the defendants advertised the use of certain automatic investment programs called Community Bot, which under slogans such as “With this system you always win” and “Winning is the only option” guaranteed investors some monthly returns between 8 and 15%. The only condition was that I could not withdraw my money in two months.

These automatic programs (bots), continues the judge, were allegedly based on a software which applied an artificial intelligence algorithm, with which the acquisition of fat profits is guaranteed. “However, the said algorithm never existed and therefore only smoke was sold,” emphasizes Calama. In this way, Arbistar offered an investment that ensures a return by developing a robot that automatically performs arbitrage with cryptocurrencies. Inverter, after installing this software On a personal computer, he only had to wait to receive the abundant profits, which were paid out weekly, always on Saturdays, with the option of adding these returns to the initial invested amounts or choosing a return. However, the judge reiterates, “he said that the automated program never existed, because the business proposal was based on a fiction.”

Calama explains it the plot delivered part of the money received from the investor to other previous ones with the payment of the agreed high interest rates, which gave them great confidence that their investment was “safe and very profitable”. “This pyramid type scheme was not only used for those who invested to contribute more money, but to attract new people by seeing the large almost immediate benefits that the previous ones had noticed.” In addition, Arbistar also offered a “friendship plan” through which clients, if they managed to attract new clients, received significant fees.

Commercial network, advertising and social networks

The three pillars of the company were an active business network motivated by financial incentives, an effective advertising apparatus and a presence on social networks. The success of the business created the image that every speculative bubble needs, the perception that the investor always wins and that the earnings from the investment continue to grow, which became the best advertisement for the product.

Another of the recruitment strategies used by the defendants, the order explains, was to hold public events in hotels and conference halls to promote themselves and win new investors, such as the one held in Malaga on May 27, 2019, broadcast on Arbistar’s YouTube channel.

However, Judge Calama says, Arbistar was sustained by the cash flows that were achieved thanks to the increase in contracts, whether it is renewals of loyal customers or new investors. Investors’ money made it possible to settle the debts contracted with them, and it was a game of continuous growth, an important indicator of the announced collapse. “The business, therefore, is no longer that there was a lack of economic rationality, but that it was not there, it was a mere simulation,” the instructor emphasized.

After receiving the money from the investors, Arbistar did not allocate it to investments that would make a profit and pay off his obligations, but he immediately directed all the capital to other traders who needed to distract him.

In the order, the number of victims is quantified at around 32,000, of which close to 5,000 are individualized, and the total amount of the fraud is valued at more than 92 million euros. He points out that 55 victims lost each amount greater than EUR 50,000, and another 17 more than EUR 250,000.

For the judge, the presentation of facts shows the existence of a criminal network built around the figure of Santiago Fuentes and of which the other defendants were part, performing various operational tasks. These defendants are Diego Felipe Fernández, Viktor Alexandre Walter, Álex Castro, Iván Grima, Léster Zarabozo and Laura Concetta. The four others investigated were not prosecuted due to lack of evidence, but were still charged with alleged money laundering in a separate section.