The Argentine justice system has ordered Tether, the issuer of the USDT stablecoin, to freeze over $3.5 million linked to Rainbowex, an alleged mega pyramid operation that is currently under investigation. The request comes after the execution of 22 search warrants and the detention of 10 individuals connected with these operations.
Argentine Authorities Hit Rainboex With 3.5 Million USDT Seizure Order
Argentine authorities have ordered Tether, the company behind USDT, to freeze $3.5 million in assets linked to Rainbowex, an alleged pyramid scheme that affected thousands in Argentina. This measure would be one of the first times the formal Argentine justice system interacts with Tether to complete an asset freeze order.
The action comes on the heels of a massive operation against individuals connected to Rainbowex’s operations. The coordinated procedure executed 22 search warrants and resulted in the detention of 10 individuals as part of a sweep in San Pedro. Also, the procedure prompted the issuance of two red alert international warrants for two Malaysian individuals.
USDT, centrally issued by Tether, can be blocked via blacklisting of the wallets holding the tainted currency. The involvement of the private sector was key to achieving this milestone, as exchanges like Lemon and companies like Chainalysis accompanied this effort with their technical support.
According to Argentine sources close to the case, these institutions “put all the information contained in their databases, as specialists in their areas to assist in the data analysis processes.”
Rainbowex posed as a real platform that used crypto transactions and movement to accrue high rewards for its investors. However, according to investigations, the system was part of a closed-loop without connection to public blockchains. When investors tried to close their accounts and withdraw their earnings, the system refused, and that was when the problems started.
The investigation is still on course. Authorities have discovered that people linked to Rainbowex even hired actors to pose as directors in events. Maurycy Lyczko, a Polish national, said that he was paid $1,500 for his participation in an awards event where the most active and successful participants were recognized by the community.
The rise in this kind of pyramid scheme has alerted authorities. The Security Ministry recently increased its vigilance on these activities, listing them as part of the crimes subject to its preventive activities.
Read more: Argentina to Patrol Cyberspace in the Hunt for Crypto Criminals
