Spanish authorities have arrested the alleged ringleader of a cryptocurrency pyramid scheme that defrauded more than 3,000 victims of 260 million euros ($300 million) with promises of 20% annual returns.
Álvaro Romiro Castillo, who goes by the pseudonym “Kryptos España,” was arrested on Thursday and denied bail as a flight risk ahead of his court appearance on Friday.
Castillo allegedly headed the Madeira Invest Club, a so-called “private investment club” that offered opportunities to investors. Real estate, expensive whiskey, luxury cars, yachts, gold, cryptocurrencies While dangling the carrot of guaranteed income.
An alleged crypto fraudster was photographed being arrested by Spanish private security forces.
According to a report from the Ministry of Interior, donations from investors were formalized through a purchase agreement for the digital artwork, with the club promising to buy it back within a certain period of time using a pre-set profit.
However, a private security investigation revealed that Madeira Invest Club was simply a pyramid scheme that used the profits of the original participants to pay new entrants.
Castillo supports far-right politicians with cryptocurrencies
Castillo also reportedly confessed to paying 100,000 euros ($115,000) to right-wing politician Luis “Alvise” Pérez Fernández for his 2024 election campaign.
Spain’s public prosecutor’s office called for an investigation into the MEP, claiming that Fernández contacted Castillo for advice on setting up a wallet for “anonymous donations from third parties outside the financial control of the authorities.”
Read more: Spain could soon settle tax debts with crypto seizures
Mr. Fernández enjoys significant support among right-wingers on social media, and in October he officially launched the anti-immigration party Se Acabo La Fiesta.
He won three seats in last year’s election.
The office is also asking that Mr. Romillo be added to the investigation into Mr. Fernandez.
Castillo says he has returned most of the money.
Mr Castillo said in a court hearing today that he had returned funds to most of the scheme’s 2,700 victims, but the Home Office estimates more than 3,000 people were affected.
The enterprise involved shell companies and bank accounts around the world, including entities in the UK, US, Singapore, Albania, Portugal and Thailand. But Mr Castillo claims he has no “formal financial training” and was trying to evade taxes in Spain.
Spanish tax authorities reportedly discovered that he had moved up to 29 million euros (about $33 million) abroad before his arrest.
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