Illegal Cuenca banking operation is shut down; Expats are among the victims

Jun 25, 2017 | 37 comments

Hundreds of Cuenca investors, including some North American expats, may be victims of an illegal banking operation shut down over the weekend.

Crowd gathers Saturday at Bank of the Future. (El Teimpo)

Police began making arrests Friday and seized office equipment and vehicles Saturday belonging to MTCoin Banco del Futura (Bank of the Future) at the firm’s offices in Cuenca and Santa Isabel. A crowd of about 200 gathered Saturday night in front of company’s main office at Av. González Suárez and Paseo de los Cañaris in Cuenca.

The attorney general’s office has charged the managers of the company with a variety of offenses, including money laundering, usury, and operating a business without proper licensing. Authorities say other charges will probably be added as the investigation proceeds.

According to the prosecutor, MTCoin was a pyramid scheme that promised investors high returns on investments of as little as $300. Interest paid on deposits started at 13% and went higher depending on the amount invested, with customers making withdrawals by debit card or at one the company’s offices. Although it said the investigation is in its early stages, the prosecutor’s offices said that invested dollars were converted into Bitcoin, an digital monetary system, and “circulated” on an international exchange. Bitcoin is illegal in Ecuador.

MTCoin has been in business for almost a year, the prosecutor says. Its slogan is, “Your money should work for  you, you shouldn’t work for your money.” An English-language version of the company’s promotional brochure began circulating in May.

The prosecutor says that the company also made money by loaning money to local residents at illegally high interest rates.

Many of those who gathered outside MTCoin headquarters Saturday night claimed that the closure was “personal and political revenge” against the managers of the business. “This is what happens when someone resents the success of other people,” said an unidentified man in the crowd. “They want revenge and they claim fraud and hundreds of innocent people are hurt. I could lose everything I own because of this.”

Among those in the crowd were several foreign residents, a Cuenca radio station reported. One couple from Texas, identified only as Skip and Trish, say that “many gringos” have investments in MTCoin. The woman said she was making a 22% return on her MTCoin deposit, the amount of which she refused to disclose.

Among the MTCoin managers arrested Saturday was a man identified as Eduardo C. who has a police record of vehicle theft, robbery, assault and illegal possession of firearms. Prosecutors believe he is head of the organization. 

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