Just one more exemple of how Bitcoin "name" is used for scams and the press has no idea of how to help people to avoid the confusion.
p.s.: "engomadinho" stands for something like "poncy"
"Engomadinho of Bitcoin": The Accused of Vanishing with R$ 70 Million
Written by Yuri Ferreira, translated from Revista Forum
Self-proclaimed entrepreneur Gustavo Diniz, who claimed to be the CEO of the company Bybot, is being accused of disappearing with R$ 70 million worth of cryptocurrency assets belonging to his clients. He became known as the "Engomadinho of Bitcoin".
Bybot claimed to buy and sell properties in Bitcoin and other cryptocurrencies, and through the profits from these sales, it promised to remunerate investors with returns between 1% and 2% of their invested amount "per day" - according to a video by Gustavo Diniz himself.
Several investors who put their money into this venture are now grappling with the disappearance of a portion of their assets, invested in the "Engomadinho's" company.
According to suspicions, Gustavo, who flaunted a luxurious lifestyle on social media, allegedly stole the cryptocurrencies from his victims and fled to a location outside of Brazil to evade legal consequences.
The company operated until a certain period, when it claimed to be undergoing "maintenance". "We don't truly know what happened. We were all waiting for the supposed maintenance, and suddenly, Gustavo took down the website, deleted his Instagram profile, and vanished from Telegram," said a businessman who invested $15,000 in the situation, speaking to the Metrópoles website.
How to Protect Yourself from Bitcoin Scams
This case resembles various other instances of financial pyramid schemes involving bitcoins. AirBitClub, G.A.S, FTX: the cases are countless, and the company names are often forgettable, but the idea is always the same: invest in something you don't understand and make a lot of money very quickly, effortlessly.
After luring investors with promises of millionaire profits, the company returns a portion of the money to investors as profit and disappears with the clients' funds.
Bitcoin scams almost always operate like this. Additionally, a minority uses actual bitcoins, and the majority neither buys nor sells the cryptocurrencies.
You invite people to an investment club. You reward the initial investors with the arrival of new ones, who are then rewarded by the third, fourth, and so on, until the system collapses. When the system collapses, you disappear.
But how can you identify whether a company is a scam or not? It's challenging, but we can help you identify some signals:
- The company lacks positive references and has previously been accused of being a pyramid scheme.
- Its leaders lack specified certification to operate in the financial market.
- The leadership promotes returns much higher than the interest rate (more than 1% per month).
- The leadership uses technically incomprehensible or extremely vague language to describe the operation.
In addition to these signals, it's important to note: if you don't understand anything about Bitcoin, don't invest in bitcoins. Study the subject thoroughly, understand how the blockchain works before putting your hard-earned money into a legitimate operator. Nonetheless, due to its unregulated nature, cryptocurrencies always carry some risk of greater loss than that of the famous bank Fixed Deposit (CDB) or the well-known stock market.