The Criminal Chamber of the National Court has sentenced two founders of the Arbistar website to eight and six years in prison for defrauding a total of 200 million euros from 32,000 individuals who invested in cryptocurrencies through the platform between 2019 and 2020. They are also required to compensate the affected parties.
In a ruling, the judges of Section Three imposed an eight-year prison sentence on the ringleader, Santiago Fuentes Jover, for ongoing fraud and forgery of private documents. His associate, Diego Felipe Fernández Nojarova, received a six-year sentence for the same crime. Conversely, the other four defendants were acquitted of fraud, organised crime, and forgery, as alleged by the prosecution. Jover and Fernández Nojarova were also acquitted of organised crime, with the latter additionally acquitted of fraud.
The ruling mandates that the two convicted individuals compensate the individuals listed by the prosecution, amounting to a total of 9,494 victims. It has also ordered the permanent closure of the Arbistar website, which was used to perpetrate the fraud.
Investigations began in September 2020 at a court in Arona (Tenerife), where the accused had their office from which they recorded some of their promotional videos. Five months later, that court referred the case to the National Court, which had initiated proceedings for the same events. The investigation culminated in a large-scale inquiry comprising 7,800 pages distributed across 24 volumes and seven separate parts: the ‘Arbistar case’.
Arbistar is the name of the platform that offered automated systems for investing in cryptocurrencies. They successfully attracted thousands of investors by promising they had developed a robot that generated profits from price discrepancies across various exchanges or cryptocurrency trading platforms. This meant allowing users to find exchanges where bitcoins (a type of cryptocurrency) were offered at a lower price, enabling them to sell instantly at a higher price. The exchanges operate similarly to a traditional currency exchange, but instead they trade cryptocurrencies such as bitcoin, ethereum, or litecoin.
The court details how Arbistar promoted itself and attracted investors, primarily retail clients, through presentations and public events held in various hotels and conference rooms across the country, all of which were broadcast via YouTube. Through these promotional activities, the Audiencia notes that they managed to secure numerous clients with Arbistar between 8 May 2019 and 12 September 2020.
After installing the purported automated programme on their personal computers and transferring cryptocurrencies to Arbistar’s electronic wallet, clients lost control over their capital and were unable to withdraw it for the following two months. During this period, the investor was only required to await the profits, initially estimated at around 8% to 15% monthly, which were credited on Saturdays, with the option to either add the amount to the initial investment or request a refund.
The court elaborates on the investment system’s functionality, stating that access to the products required a prior invitation from an Arbicorp client or the Arbistar website itself. Once the invitation was received, the client had to select the appropriate product, making a contribution in bitcoins. From that moment, the client could only recognise their contribution through the corresponding platform for the contracted product, where they could verify their balance and, if applicable, the accumulated profits by entering their username and password. This way, they could check their contributions to the platform, withdrawals, and compoundings (automatic reinvestment of generated returns), along with the licenses for the bots they had acquired and their personal data.
