Argentine authorities have taken action against Rainbowex, an alleged pyramid scheme, by ordering Tether to freeze over $3.5 million in assets linked to the operation. This comes after the execution of 22 search warrants and the detention of 10 individuals connected to Rainbowex. Additionally, two Malaysian individuals have been issued red alert international warrants in connection to the scheme.
The involvement of Tether in freezing the assets linked to Rainbowex is significant, as it marks one of the first times the formal Argentine justice system has interacted with the company to complete such an order. USDT, which is centralized by Tether, can be blocked via blacklisting of wallets holding the tainted currency. The private sector also played a crucial role in this operation, with exchanges like Lemon and companies like Chainalysis providing technical support.
Rainbowex presented itself as a legitimate platform that used crypto transactions to generate high rewards for investors. However, investigations revealed that the system was a closed-loop with no connection to public blockchains. When investors attempted to withdraw their earnings, they were unable to do so, leading to suspicions of fraudulent activity.
The ongoing investigation has uncovered that individuals associated with Rainbowex went as far as hiring actors to pose as directors in events. The scheme’s reach extended to international borders, as seen with the two Malaysian individuals who are now subjects of red alert warrants. Maurycy Lyczko, a Polish national, disclosed that he was paid $1,500 to participate in an awards event for the scheme.
The increase in pyramid schemes like Rainbowex has prompted Argentine authorities to heighten their surveillance efforts. The Security Ministry has prioritized the monitoring of such activities as part of their preventive measures against cybercrime. This recent crackdown on Rainbowex is a testament to the government’s commitment to combating fraudulent schemes in the cryptocurrency space.
In conclusion, the asset freeze order issued to Tether regarding Rainbowex’s operations marks a significant step in the Argentine government’s fight against pyramid schemes in the crypto industry. The cooperation between the formal justice system, Tether, and private sector entities demonstrates a collective effort to combat fraudulent activities and protect investors. As the investigation progresses, more insights into the extent of Rainbowex’s operations and involvement in the crypto space will likely emerge.
