This article was originally published on October 16, 2024 in Revista Anfibia.

Cover art by Sebastián Angresano

Around 8 p.m., the streets of the town of San Pedro were empty. At the soccer clubs, games and practices come to an untimely halt. Conversations are interrupted. About a third of the inhabitants receive an alert on their cell phones and have barely 40 minutes to act. When customers reappeared at the store at 600 Molina St., a few blocks from the bus terminal, Claudio Núñez greeted them with a sarcastic laugh and a question: “Did you ‘trade’ already?

Claudio, 52 years old, laughs, but he also traded, as did his wife, Alejandra Lobianco. They both learned to use the word in a different way just a few months ago, but the grocery store owner and the auto mechanic already look like born market traders: they bought and sold cryptocurrencies in minutes, in an app on their cell phones. Or so they thought. They each invested US$200, which they will probably never see again.

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Between 12,000 and 20,000 people from San Pedro, a large town in the Buenos Aires province where the last census counted almost 70,000 inhabitants, joined RainbowEx, a supposed crypto trading platform that promised an extraordinary profit in dollars of between 1 and 2% per day. That means an annual interest rate of 3,490%. Managed by a foundation called Knight Consortium, the company would send a nightly “signal” via the Telegram messaging service indicating which cryptocurrency was worth buying and what yield it would give. The person who sent the messages called themselves Ali and used the avatar of an Asian woman. People in San Pedro call them “La China” —- “the Chinese woman.”

On October 7, everything (what they had or what they thought they had) vanished into thin air. There had been feverish coverage about San Pedro for days. Journalists had claimed that the platform was a pyramid scheme, and there was a new message from Ali — users wouldn’t be able to take out their money for 14 days. Sources in the crypto sector say that the news generated a small panic nationwide and that, while it was on the media agenda, there were considerable money withdrawals from the most established cryptocurrency wallets.

Today, a provincial and a federal court are investigating the platform and those behind it.

In one, federal prosecutor Matías Di Lello, head of the Decentralized Prosecutor’s Office of San Nicolás, is investigating the platform for unauthorized financial intermediation and money laundering. Di Lello is supported by the UFECI of the prosecutor Horacio Azzolin, in charge of cybercrime.

Di Lello ordered the raid of two financial firms that exchanged the “money” in RainbowEx for U.S. dollar bills and indicted the owner of one of them, Matías Liberatti, and Luis Pardo, the platform’s visible leader. Prosecutor María del Valle Viviani is leading the provincial case, and has already taken testimony from alleged victims. Privately, she insists that those who invested did not commit any crime and encourages them to testify.

Neither RainbowEx nor Knight........

© Buenos Aires Herald