Minerworld Brazilian Crypto Mining Company Says It Cannot Pay Investors

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Brazilian Mining Company Minerworld Says It Cannot Pay Investors

There is a Brazilian mining company that seems that it’s not able to pay investors that invested in it. Minerworld faces allegations of being a Ponzi scheme and it might not have the necessary Bitcoins to pay to those who place their funds in the firm. The information was released by Criptonoticias on December 3rd.

A court has already ordered the company to use the financial resources that it has to pay investors their respective sums of money. However, the company informed the court that it is not able to make payments due to the fact that the remaining funds were spent on keeping the operations running. Minerworld has also terminated contracts with service providers.

Crypto mining operations all over the world have been affected by the current bear market in which virtual currencies are since the beginning of the year. In China and other countries, there are some companies that are turning off their mining hardware because they are not able to generate profits from these activities. Moreover, Bitcoin’s hash rate has plummetted almost 50% since its all-time high in August.

The number of individuals affected could be close to 50,000 according to the data provided for the company. However, Minerworld has also been accused of being a pyramid scheme. The first suspicious activity occurred when the company said that it lost 851 bitcoins in October 2017 due to a phishing attack that took place on the Poloniex exchange. However, the exchange did not inform about any theft or strange situation on its platform.

Additionally, authorities from the Securities Commission in Paraguay labelled the company as a threat back in October 2017 when the bull market in virtual currencies was taking shape.

Brazil alongside Argentina, Colombia and Chile are home of very interesting startups that have been growing during the last few years. Buenos Aires, for example, is considered the second place in the world in terms of crypto-related startups according to this report. Bogota is also in the top 10 released by this report.

During the last year and the beginning of this one, several Initial Coin Offerings and fraudulent projects were released to the cryptocurrency market. In some cases, they were able to steal users fund and escape with the money. However, the regulatory framework around the world is becoming more sophisticated and clear.