Spanish Authorities Uncover €260M Crypto Ponzi Scheme

Key Highlights

• Spanish authorities arrested the mastermind, Álvaro Romillo Castillo, known as CryptoSpain, for running a €260 million Ponzi scheme 
• The scheme, known as Madeira Invest Club, promised high, guaranteed returns on crypto and luxury assets 
• The investigation revealed that the stolen €260 million was laundered through a complex network of offshore shell companies in the Madeira Islands and Cyprus

Spanish law enforcement has dismantled a cryptocurrency Ponzi scheme known as the Madeira Invest Club. The operation comes with the arrest of the alleged mastermind, a 42-year-old man from Madrid named Álvaro Romillo Castillo. 

(Source: Wu Blockchain on X)

Who is Álvaro Romillo Castillo?

Castillo, who was widely known online under the alias “CryptoSpain,” was taken into custody on November 7. He now faces serious charges, including fraud, money laundering, and belonging to a criminal organization. 

Authorities believe that his scheme deceived more than 3,000 investors across Europe and other parts of the world. This helped him to steal around €260 million.

The Madeira Invest Club presented itself as an exclusive private investment group. It used deceptive marketing trick to attract people with promises of high returns. Potential investors were told they could earn up to 20% annually by putting their money into a mix of trendy and traditional assets. These included cryptocurrencies, gold, luxury yachts, expensive whiskey, real estate, and high-end cars. 

The scheme was reportedly expected to provide what seemed like a safety net called a “buyback guarantee.” This promise to buy back investments at a higher price. The operator known as “CryptoSpain” built a large following on social media. He hosted online seminars and used targeted advertisements to promote what he called a risk-free way to profit from digital currencies.

Spanish Authorities’ Crackdown on Scam

The investigation was launched in mid-2024 after victims came forward. It concluded that the operation was a classic Ponzi scheme. A financial audit confirmed the harsh truth, which was that the Madeira Invest Club was not making any real investments. 

Instead, money from new investors was simply used to pay fake “returns” to earlier investors. This created the illusion of a successful and profitable business. A spokesperson for the Spanish Ministry of the Interior stated that the scheme preyed on people’s desire for quick wealth, using the popularity of crypto and luxury goods as a cover. When the flow of new money slowed down, the entire operation collapsed, leaving most investors with nothing.

Scam’s Connections Across the Globe

While many are middle-class citizens of Spain, the scheme also ensnared people in Portugal, Italy, Germany, and as far away as the United States and Latin America. Many were retirees or small business owners who lost their life savings. 

One retiree from Madrid shared that she lost €50,000. She said that she has seen convincing charts and data that made the investment seem legitimate. 

On average, each victim lost around €80,000, with some losing over one million euros. The criminals moved the stolen money through a complex network of shell companies based in offshore locations like the Madeira Islands and Cyprus. They used cryptocurrency mixing services and converted funds to cash to hide their tracks.

The arrest was the result of an 18-month international investigation. Police raided several properties, seizing luxury items like a Ferrari and a yacht believed to be bought with stolen funds. 

With help from Europol, investigators followed the digital money connections to cryptocurrency exchanges in Estonia and Panama. The suspect has been denied bail due to concerns he might flee the country. His court date is set for November 15th, and prosecutors are seeking a 15-year prison sentence. This case serves as a stark warning about the risks in the less-regulated cryptocurrency world, where promises of guaranteed returns often lead to total loss.

According to a mid-year report from the blockchain analysis firm Chainalysis, criminals have stolen over $2.17 billion in the first half of 2025 alone. This figure has already shattered the total for all of 2023. If this trend continues, thefts for the entire year could reach a staggering $4 billion.