Argentinian Crypto Fraud Scheme Dupes 20,000 Investors in San Pedro

A USDT-themed crypto platform has left up to 20,000 residents of San Pedro, Buenos Aires, fearing financial ruin after investing in what lawyers now describe as a fraudulent pyramid scheme.

The masterminds behind this project promised to double investors' money within six weeks, according to Adolfo Erdaire, a local lawyer representing several victims.

Daily Returns of 2% and US Dollar Payments Promised

The operators of the platform, known as Knight Consortium, lured investors by offering daily returns of up to 2%, paid in US dollars. Many residents, including retirees, reportedly invested their life savings into the scheme. Erdaire claims that for weeks, some investors have been unable to withdraw funds, sparking widespread fear.

The firm behind the platform, calling itself RainbowEx, claimed to be a crypto exchange but appears to be unregistered and lacks any legal endorsement or financial backing. Initial lawsuits against the company are expected to be filed soon, marking the beginning of legal proceedings.

Bogus ‘CEOs’ and a Phantom Advisor

The fraud has divided the small city, with some residents still hopeful that RainbowEx is legitimate. However, Erdaire has accused two men, supposedly fronting the consortium, of being Polish actors posing as CEOs. These individuals were reportedly hired to speak at local events promoting the scheme, a revelation supported by video evidence.

Investors also followed advice from an "Asian woman" known as “La China,” who regularly provided cryptocurrency investment tips via a Telegram channel. Her nightly tips were so influential that they reportedly brought the town to a standstill as residents waited for her guidance.

Related reading：Argentina Imposes Stricter Regulations on Crypto Exchanges

Suspicion of AI Use and Actors Involved

While some suspect that La China may not be a real person, possibly created using AI tools, others have identified an Indonesian woman advertising her acting services on Fiverr who bears a striking resemblance to her. Meanwhile, one of the actors involved, Maurycy Lyczko, admitted to being hired by an anonymous individual for $1,500 to perform at a conference in San Pedro.

Investors Left in Despair

Mariano, one of the investors, explained how he was convinced by a friend to join the scheme. He was promised payments in dollars and assured that his initial investment would be returned within 45 days, after which he could keep the profits.

Like many others, Mariano's investment was funneled through the RainbowEx platform, which promised to convert Argentine pesos to USDT.

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The investigation into the Knight Consortium and RainbowEx is still in its early stages, but this crypto pyramid scheme has already caused widespread financial damage in San Pedro.

The fraudulent promises of doubling investments and daily returns have left many citizens financially stranded, with mounting concern over how the scam went unchecked for so long.