Bitcoin Scammer arrested in Spain

National Police of Tenerife had arrested Santiago Fuentes for defrauding up to 32,000 people in a bitcoin scam, the total sums to over 850M euros (over $1B).

The accused is the director of ArbiStar 2.0 based in Playa Las Americas. Authorities have launched an investigation right after the ArbiStar 2.0 clients filed a lawsuit that alleges the firm of doing a pyramid scheme.

A blog states that ArbiStar 2.0 is a company that assumes to have a series of mathematical algorithms to make a purported Bot that is “successful in cryptocurrency arbitration.” Although the clients assumed it to be a scam specifically after ArbiStar 2.0 announced the cancellation of the alleged Community Bot project last September 12. Upon the cancellation, more than 32,000 users were no longer permitted to access the forms of bitcoins that they had invested in the company. During that time, Fuentes has claimed that the cancellation was a result of “computer error”, and that he didn’t “close and disappear,” even if he intended to scam the mentioned number of users.

Moreover, Fuentes was alleged to have appeared in a video on the official ArbiStar YouTube channel last September 14 to “explain the reason for the Closure of the Community” and how the payments can be made. He had then stated that:

“There will be more than 2000 monthly payments, which is expected to be collected in 16 months but reality will be much faster.”

Fuentes later stated that the Community Bot product has been mismanaged and then it “caused the Community Bot to fall.” He had been denying that there was “a scam or a bankruptcy’ and assured his clients by implying that he didn’t run away, and he would do it if he was scamming his clients:

“When I warned clients that this particular product was being closed, I was at my house and you will understand that if the intention was to scam, no one would act in this way.”

On the other hand, Fuentes has been alleged to be alternating between the four houses that he owns in the region, he claimed that he did it because of the threats he received. He also claimed that he has closed his local offices because of the threats. But the authorities declared that the entire scene had affected the investments amounted to at least 9.3M euros. Police were successful in tracking down Fuentes in one of his four homes in Tenerife.

Fuentes will be charged with fraud, money laundering, and for having criminal ties.

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