Brazilian Mining Company Under Investigation, Says It Can’t Pay Investors

Brazilian Mining Company Under Investigation, Says It Can’t Pay Investors
Kevin O'Brien

Brazilian mining company Minerword, who is facing allegations of being a Ponzi scheme, now claims it does not have enough bitcoins to compensate investors who pledged money into the company.

A court order purportedly mandated the company to use remaining financial resources to pay back investors, but reporting from Mixiamax said 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.

Minerworld allegedly asked for permission to publish account statements for the last four months in order to show income and expenses. The number of affected investors due to the purported lack of funds eclipses 50,000 people.

A Possible Ponzi Scheme?

Minerworld has come under fire from people in a variety of circles who claim it is a pyramid scheme. Officials in Brazil are taking up a case against the company.

Suspicions were raised after Minerworld claimed they lost 851 bitcoins in October 2017 due to a phishing attack on the Poloniex exchange. The exchange did not release any statements detailing a theft, according to media.

Authorities also became suspicious about the company due to alleged promises of high returns on investment and information about prizes like international trips and imported vehicles.

Minerworld has affirmed they are not a pyramid scheme or have a model similar to a multi-level business, according to CryptoNoticas.

However, Minerworld also faces investigations and accusations from authorities in Paraguay. The nation's Securities Commission labelled the company a hoax in October 2017.

Brazil Morphing Into A Financial Hub

Research by the Inter-American Bank of Development has revealed how Latin America is becoming home to a growing number of fintech startups.

LATAM Tech wrote how this fact is notable since the idea of ‘fintech’ was relatively unknown in the region five years ago. Big technological advances couples with increased usage of mobile phones and Internet has led to a fintech renaissance.

Brazil alone has 380 fintech-related companies and has experienced some of the biggest growth in Latin America in relation to the industry.