Arbistar: A Crypto Ponzi Scheme Or An Informatic Error?

Promising its investors to achieve financial freedom, Arbistar 2.0, a Spanish company based in Tenerife dedicated to cryptocurrencies, managed to attract thousands of people to its platform. On September 12, the company issued a statement blaming a computer failure. It reported that it was forced to freeze the accounts of its 120,000 clients. De facto, this means that no one can recover the money entered into the Arbistar system. Although the company has pledged to pay back its investment in stages, some of Arbistar’s clients find it difficult to recover their capital and are already organizing legal measures against the company for alleged fraud crimes.

The case is already in the hands of the Police in Tenerife, which has confirmed an open investigation into that company and the destination of the money deposited by its investors, but without providing even more data, because it ensures that the proceedings are confidential.

“This is not a pyramid scam, or a Ponzi, or any other story,” argues the director of Arbistar 2.0, Santiago Fuentes, in a statement made by videoconference to Televisión Canaria, “it is just a computer error that we have to settle, liquidate and continue with our business. “

In 2017, the National Court sentenced the former head of Forex Finance, Germán Cardona Soler, known as the Spanish Madoff, to 13 years and three months in prison for the pyramid scam with which he defrauded 350 million euros to 180,000 people between 2007 and 2010. Santiago Fuentes held the position of director of expansion of Forex Finance. Fuentes, whose mission was to give conferences to attract clients for the pyramid scheme, was acquitted at trial.

According to Tulip Research estimates, a body dedicated to analyzing companies looking for scams in the blockchain environment, Arbistar could have mobilized 1,000 million dollars.

Arbistar 2.0 ensures that during this week, it will launch a platform to facilitate those affected to recover their investment “in six or twelve months.” 

Initially, the repayment plan was considered in two phases, one in 2021 and the next one in 2022. The reimbursement would be done in products developed by Arbistar, Like Arbicoin, A digital currency created by the company, and deposited in the name of the affected clients in the loyalty club. With the clients accepting this offer, they would also have to stop any legal action against the company. 

According to Spanish Legislation, there are three possible solutions. Firstly, the affected clients can stay put and not do anything to see what happens. They can also accept the reimbursement plan and end every legal action they had planned against the company, whether they would get their investment back or not. Or finally, the Police Investigation can find the activities illegal and continue the crime investigations.

 

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Image: Gerd Altmann 

*Disclaimer: Fyggex, does not give any guidance, advice or recommendations to neither invest or not in any available cryptocurrency directly or indirectly via any trading platform, exchange or provider. Our sole purpose is to make you aware of the related real or potential risks and opportunities so that you can make your own research prior to any financial decisions you may want to take. Past performance and position are not a guarantee of risk-free future returns.

 

Sources

Belinchón F. 2020. Arbistar: la caída de un presunto Ponzi español con 120.000 afectados. Cinco Días, El país: https://cincodias.elpais.com/cincodias/2020/09/24/mercados/1600973133_065889.html

Cinco Días. 2020. Fuentes: “Esto no es una estafa ni un Ponzi, es solo un error informático”. El País: https://cincodias.elpais.com/cincodias/2020/09/28/mercados/1601300577_141437.html?rel=mas

Díaz E. 2020. La plataforma de bitcoins Arbistar deja a 120.000 clientes atrapados sin poder recuperar su dinero. El economista: https://www.eleconomista.es/empresas-finanzas/noticias/10794063/09/20/La-plataforma-de-bitcoins-Arbistar-deja-a-120000-clientes-atrapados-sin-poder-recuperar-su-dinero.html

Picazo A. 2020. El fraude de las criptomonedas: Arbistar lleva 8 meses sin pagar a 32.000 familias que confiaron en sus productos. El Cierre Digital: https://elcierredigital.com/investigacion/544032202/estafa-criptomonedas-Arbistar-8-meses-sin-pagar-32000-familias.html

S.C. 2020. Una plataforma de bitcoins deja a más de 32.000 familias sin poder recuperar sus ahorros. La Voz de galicia: https://www.lavozdegalicia.es/noticia/economia/2020/09/29/plataforma-bitcoins-deja-32000-familias-poder-recuperar-ahorros/0003_202009G29P28993.htm