Brazilian Platform Lured Customers With Bitcoin Before Sudden Closure

August 24, 2022
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​​​​​​​A sports-betting platform in Brazil that promised its players huge returns has mysteriously and suddenly shuttered, leaving subscribers scrambling to find out where their money has gone.

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A sports-betting platform in Brazil that promised its players huge returns has mysteriously and suddenly shuttered, leaving subscribers scrambling to find out where their money has gone.

Nova Bets Brasil, a company that advertised itself by accepting bitcoin and having local celebrity endorsers, issued a statement on its site last week that it had been hacked.

“A few days ago the company suffered a virtual attack on its platform, and that triggered many frauds in the process of withdrawals and the company paid thousands of dollars in an illegal way,” it read.

“We still do not know exactly the amounts, because more than 5,000 fake accounts were created and a majority requested withdrawals. The last few days have been of many struggles and challenges in trying to get the company back on its feet, and because of this we have taken the decision to stop the registrations until everything is solved.”

Among those promoting Nova Bet were Brazilian footballer Mário Jardel, who once played for the international squad, and prominent sports journalist Marcio Spimpolo. YouTuber Rogerio Betin first drew attention to the company, which promised clients profits of up to 400 percent of their investment if they invited friends.

Such wild claims are not out of the ordinary in Brazil’s unregulated market.

“It's not the first and not the last case in Brazil,” said Luiz Felipe Maia, a partner at law firm Maia Yoshiyasu.

“That happens actually, when you have a market and you don't have regulation. We don't have any kind of monitoring. We don't have the operators going against the illegal operators or fraudsters. In a regulated market you'll also have the legal providers going against the black market, in Brazil you don't have anything.”

The website for Nova Bets Brasil is now shut down. Its Instagram account, which features an array of minor celebrities and declares itself “one of the best in Brazil”, has not been updated since May 31.

Mark Falcon, payments expert and director at Zephyre, an antitrust and economics advisory firm, told VIXIO that accepting bitcoin can be a red flag in general.

“Regulators have been very slow to recognise the harm from it, that it needs effective regulation. Some regulators even aided and abetted by suggesting that bitcoin could become a mainstream payment method, but that's so far-fetched. I think the only country that has done that is El Salvador as legal tender has been largely a failure.”

According to YouTuber Betin, some customers claim to have lost more than BRL40,000 ($8,000) to Nova Bets Brasil. For comparison, the average yearly salary in the capital city of São Paulo is BRL80,000, according to the Economic Research Institute.

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