The Public Ministry of São Paulo requests that the executives of GenBit and their associated firms be sentenced to prison. The exchange house promised to pay what it owes to the investors in 10 parts, as of March 2020.
In recent days, it was reported that the Bitcoin exchange house, GenBit, based in Brazil, released a statement this week in which it apologizes to its investors for the problems caused in recent months, following a series of legal problems faced by the firm
The text by the president of GenBit, Nivaldo Gonzaga, published in local media, refers to a public civil action filed by the Public Ministry of São Paulo with a value of 1,000 million BRL (USD 246 million) against Gensa Serviços Digitais, a company that represents the Tree Part Group, to which Genbit belongs.
The businessman said that he understands that all the turmoil has caused the investors a lot of trouble. However, he stated that that was never his intention, so he acknowledged what happened and apologized.
Gonzaga also says in the text that the lawsuit filed by the Public Ministry of São Paulo will be an “opportunity” for the business group that he chairs.
He believes that this action by the Public Ministry will serve for good since they will be able to prove once and for all to state and federal agencies that the Tree Part/GenBit Group has always worked under Brazilian law.
According to the lawsuit by the Public Ministry, the group of which Genbit is a part made publicity through social networks like YouTube and Facebook. It should be noted that the platforms offered a collective investment contract, within a business model without transparency and with a promise of earnings of up to 15% per month.
Delayed Payments and Lawsuit by Public Ministry
Despite apologizing, Genbit has not paid its 45,000 members for four months. Faced with the breach, the company abandoned Bitcoin operations and launched its cryptocurrency in Brazil, TreepToken (TPK), a tactic similar to the one adopted by Minerworld and Unick Forex, two schemes that also affected thousands of people.
The company also said that it intends to make the payments in ten parts, starting in March 2020, a period in which it expects the TPK cryptocurrency to increase in value.
Non-compliance with the payment to the investors is one of the motivating factors for the lawsuit by the Public Ministry of São Paulo against Gensa. The value of 1,000 million reais contemplated in the lawsuit refers to the estimated loss that the companies of the group caused to their 45 thousand clients.
The Public Ministry of São Paulo also requested the conviction of all those involved, among whom are five other companies included in the lawsuit.
Together with other Gensa subsidiaries, such as Zero10Club, Genbit was denounced by the Brazilian Securities and Exchange Commission (CVM) for an irregular offer of investments. In practice, this warning means that the business is recognized as a financial pyramid scheme, also known as a Ponzi scheme.
By Willmen Blanco