On July 16th, 20 individuals were arrested by Spanish police. The arrests took place primarily in Madrid, as well as other areas throughout the country. These individuals were arrested due to their affiliation with Unetenet, a Spanish cryptocurrency pyramid scheme.
Unetenet, launched in 2013, is a pyramid scheme that operated through the sale of Unete, a digital currency similar to Bitcoin. Investors exchanged Euros for the scheme’s cryptocurrency, which investors were promised would maintain a value of $1 per coin.
Throughout the duration of the scheme, police estimate that investors suffered as much as 50 million Euros in losses. The pyramid attracted around 50,000 investors world wide, with 6,000 originating from Spain.
In late June, it became official that a significant portion of investors had begun taking legal action against the heads of the operation. However, Spanish police verified that investigations on Unetenet began about 18 months ago, when a former employee of the group confronted law enforcement.
Investors were intially drawn to the scheme due to compelling promotions; Unetenet gained popularity immediately after launch due to exciting events, and promising sales pitches.
The scheme promised investors up to $1,300 in weekly returns. In addition, Unetenet offered the ability to shop online with Unete, through their official website.
In addition to arrests, police seized 22 million USD and 5 million Euros from associated bank accounts. Two luxury cars and 18 computers were also confiscated.
Funds from the pyramid flowed through an operation located in Saint Vincent and the Grenadines, a Carribean island used as a tax haven. However, the illicit funds were frozen in April 2014, when Riemutu, a Latvian bank, closed an account used by Unetenet. The account was closed in response to a money laundering investigation associated with the account, thus ending the scheme.
In addition to the cryptocurrency pyramid scheme, founder José Manuel Ramírez Marco also solicited funds from investors through donations to the Unetenet Foundation. The Foundation expressed it was gathering donations for victims of sexual abuse, however the group was never registered, and did not conduct charity of any sort.
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