- The National Court’s Appeals Chamber has doubled the prison sentences for Arbistar founders Santiago Fuentes and Diego Felipe Fernández for a massive crypto fraud.
- The judges now consider the conduct a case of “singularly aggravated” fraud and also convict the main defendants of criminal organization.
- The scheme revolved around the alleged “Community Bot”, an automated arbitrage system that, according to the ruling, never truly existed.
- The court orders compensation for 9,494 documented victims and issues a ruling expected to influence future Spanish cases on crypto-related pyramid schemes.
The Appeals Chamber of Spain’s National Court has sharply increased the prison sentences imposed on the two main figures behind the Arbistar platform, a crypto-investment venture that, according to the courts, operated as a large-scale fraud. In its new ruling, the chamber concludes that the pair orchestrated a massive and prolonged scam targeting thousands of small investors who entrusted their bitcoin to an allegedly sophisticated trading system that, in practice, never worked as advertised.
With this decision, the National Court responds to the complaints of the prosecution and private accusers, who had argued that the original ruling had fallen short. The new judgment describes the Arbistar case as a paradigmatic example of a crypto-based pyramid scheme: an operation built around a product presented as innovative technology, but which in reality relied on new clients’ money to pay earlier participants, causing losses estimated at around €200 million between 2019 and 2020.
Sentences for Fuentes and Fernández are doubled
According to the new ruling, Arbistar founder Santiago Fuentes Jover will now serve 16 years and six months in prison, instead of the eight-year term initially imposed. His business partner, Diego Felipe Fernández Nojarova, sees his sentence rise from six years to 11 years and six months behind bars. The Appeals Chamber thus partially upholds the appeals lodged by the Public Prosecutor’s Office and several private accusers against the first instance decision issued in September by the Third Section of the National Court.
The judges confirm that Fuentes and Fernández were responsible for defrauding approximately €200 million from around 32,000 investors during a period spanning from May 2019 to September 2020. In the initial judgment, the court had already found them guilty of continuous fraud; what changes now is both the legal qualification and the severity of the punishment, after the Appeals Chamber decides to apply the aggravated form of fraud and to add the crime of belonging to a criminal organization.
For the court, the Arbistar operation was not an isolated series of misrepresentations, but a structured and long-lasting scheme. The ruling stresses that the conduct went far beyond a one-off deception: it involved the systematic recruitment of investors, sustained over time, through an apparently legitimate business structure and a carefully crafted marketing narrative that promised high and steady returns in the crypto markets.
By endorsing the appeals of the prosecution, the chamber explicitly rejects the idea that the lower penalties could be justified because each individual victim may have lost less than €50,000. Instead, the judges underline that what matters for the aggravated offence is the overall scale of the harm, which, in this case, reaches figures that the ruling describes as “exceptional” and “extraordinarily high”.
From simple fraud to “singularly aggravated” fraud
A central aspect of the new judgment is the application of the “singularly aggravated” form of fraud under Spain’s Criminal Code. The first ruling had considered the facts a continuous fraud but declined to apply the aggravated subtype on the grounds that it had not been proven that any single defrauded investment exceeded €50,000. The Appeals Chamber, however, aligns itself with the case law of the Supreme Court and concludes that this interpretation was too restrictive.
The new decision stresses that, when determining whether the aggravated threshold is met, the global economic damage must be taken into account, not just the amount lost by each individual investor. The judgment notes that the initial sentence itself acknowledged a total harm far above €250,000, one of the thresholds expressly mentioned in Article 250 of the Criminal Code for applying the aggravated type of fraud.
The judges reason that allowing the total damage to be fragmented into thousands of smaller losses would have a paradoxical effect: the larger and more widespread the fraud, the lower the criminal response. In the words of the chamber, the fact that each victim’s loss remains below €50,000 “cannot become a factor that mitigates the penal response, especially in situations where the repeated use of the same deceitful tactic and the massive recruitment of victims multiply the global damage into the tens or hundreds of millions.”
Therefore, the Appeals Chamber concludes that the Arbistar case fits squarely within the aggravated category, given the extraordinary number of affected investors, the magnitude of the patrimonial loss and the systematic nature of the deception. This legal reclassification is one of the key reasons why the prison sentences for the two main defendants are now significantly harsher.
Alongside the criminal penalties, the court also emphasises the civil consequences of the case. It orders Fuentes and Fernández to compensate 9,494 victims who appear in the list submitted by the prosecution, with specific amounts to be determined during the execution phase of the sentence. At the same time, the Appeals Chamber upholds the acquittal of four individuals and three companies that had already been exonerated at first instance, confirming that their involvement was not sufficiently proven.
Community Bot: a non-existent arbitrage system
At the heart of the Arbistar scheme was a product known as the “Community Bot”, which the company advertised as an automated arbitrage system in the cryptocurrency markets. According to the ruling, between 2019 and 2020 Fuentes and Fernández, with the assistance of other unidentified individuals, created a group of companies headed by Arbistar, whose apparent purpose was to offer investment services in cryptoassets, mainly through this supposed automated software.
The platform presented the Community Bot as a highly sophisticated program capable of executing automatic arbitrage operations on different cryptocurrency exchanges, buying where prices were lower and selling where they were higher, thereby generating steady and attractive returns. This promise led tens of thousands of people to transfer their bitcoin to wallet addresses controlled by Arbistar, convinced their funds would be managed by an advanced algorithm.
However, expert and police reports included in the case file painted a very different picture. The Appeals Chamber accepts their conclusions and states that the Community Bot did not exist as a truly operational automated system. According to the judgment, there was no evidence of the promised automatic arbitrage activity, and any real trading that did take place was “residual, manual and absolutely insufficient” to sustain the returns that Arbistar was offering to clients.
In practical terms, the system functioned as what the court calls a “defraudatory scheme”: the funds contributed by new investors were used to simulate payments and profits to earlier participants, without any genuine underlying economic activity capable of generating such yields. The judgment explicitly describes this as a structure characteristic of a pyramid or Ponzi-type mechanism, hidden behind the façade of an innovative crypto trading tool.
To keep the influx of new money flowing, the Arbistar network relied on an intensive promotional strategy, which included commercial events, social media campaigns, the use of so-called “leaders” or promoters to attract fresh investors, and direct communication with clients. Digital contracts formalised what appeared to be routine investment operations, bolstering the illusion of a legitimate financial service when, in reality, control over the funds remained exclusively in the hands of the defendants and their associates.
Criminal organization: more than a two-man operation
Another major change introduced by the Appeals Chamber is the conviction for membership of a criminal organization. In the first ruling, the court had acquitted the defendants of this charge, arguing that only two individuals had been convicted and that, under Supreme Court doctrine, at least three participants are required to constitute a criminal organization.
The new judgment takes a different approach. The chamber points out that, beyond Fuentes and Fernández, the factual narrative in the original sentence already identified a third person with a managerial role inside Arbistar. In light of this, the Appeals Chamber holds that the requirements for the offence of criminal organization are indeed met, even if not all participants have been identified or prosecuted.
The ruling cites Supreme Court case law to underline that it is not necessary for every member of the organization to be fully individualised, charged or convicted, as long as there is sufficient evidence that the structure was in fact composed of more than two people. What matters, according to the chamber, is the existence of a stable and organized framework dedicated to carrying out criminal activities over time, with a functional distribution of roles.
In the Arbistar case, the Appeals Chamber highlights that the platform relied on a lasting organisational structure that coordinated technological infrastructure, customer acquisition strategies, fund management and communication with investors. This structure, in the court’s view, cannot be reduced to the actions of two isolated individuals but clearly reflects a group dynamic consistent with the legal definition of a criminal organization.
By adding this conviction, the court not only increases the length of the prison sentences but also sends a broader message: complex financial frauds involving cryptoassets will be analysed through the prism of organized crime when there is evidence of a stable group acting in a coordinated way. This aspect of the ruling is expected to have particular relevance for other investigations into similar schemes currently before the Spanish courts.
A landmark case for future crypto fraud proceedings
Legal experts involved in the case agree that the Arbistar ruling will likely become a reference point for future crypto-related fraud prosecutions in Spain. Several of the private accusers have publicly welcomed the Appeals Chamber’s decision, describing it as more robust and comprehensive than the initial judgment and noting that it clarifies key issues that had remained somewhat ambiguous.
Lawyer Miguel Ángel Fernández-Salinero, one of the accusers, views the new decision as a step towards a more forceful criminal response to pyramid-like frauds linked to digital assets. He highlights that the court doubles the prison terms for Fuentes and Fernández, reinforces the aggravated fraud classification and adds four more years for the criminal organization offence. While he still believes that Spanish law could benefit from a specific criminal type for pyramid schemes, he recognises that the ruling addresses many of the concerns raised in the appeal and leaves room for the defence to pursue a cassation appeal before the Supreme Court.
From his perspective, it is particularly important that the Supreme Court eventually pronounces on this case, given that it is one of the first major crypto pyramid schemes to reach such an advanced procedural stage in Spain. He also points out that, for the execution of the sentence, it has already been established that compensation to victims should not take the form of returning bitcoin units themselves, but rather the fiat equivalent value at the time of the judgment, a point that could have practical consequences in a volatile market environment.
Another lawyer, Carlos Aránguez, who represents a large group of affected investors, also praises the Appeals Chamber’s decision. In his view, the doubling of Santiago Fuentes’s sentence is proportionate to what he describes as a macro-fraud that has upended the financial situation of thousands of small savers. Aránguez underlines that, beyond this case, Fuentes still faces additional proceedings, including a money-laundering case in which part of his family is reportedly implicated, and another conviction pending before the Supreme Court relating to coercion in a separate crypto-related dispute.
For Aránguez, the new ruling demonstrates that the National Court is taking these types of scams seriously, sending what he considers a clear signal of deterrence. He emphasises the speed and thoroughness with which the Appeals Chamber has worked, given the complexity and scale of the proceedings, and describes the judgment as a detailed and rights-conscious piece of work that inspires confidence among victims.
From Valencia, lawyer Jesús P. López, a specialist in new technologies and Legaltech who also represents a number of investors, likewise expresses satisfaction with the Appeals Chamber’s analysis. He considers the ruling to be more consistent and carefully reasoned than the original decision, particularly regarding the assessment of transaction evidence and the clarification of how compensation in cryptocurrency cases should be handled.
Broader implications for crypto-investment disputes
The ruling also addresses the nature of bitcoin from a legal standpoint, referencing earlier decisions of the Supreme Court that classify it as an intangible asset or unit of account, rather than as legal tender. Based on that doctrine, the National Court reiterates that compensation in cases of crypto fraud does not consist of returning the exact same tokens, but of restoring the equivalent economic value, which in this instance is anchored to the price at the date of the judgment.
For practitioners, this clarification offers greater legal certainty for future disputes involving digital assets, as it provides a practical criterion for calculating compensation and reduces the risk of endless technical debates over the specific coins or keys involved. The decision may therefore serve as a guide in other ongoing cases concerning platforms such as Fxeinning, Kuailian, Nimbus Platform, Revena Capital Trading Company or Algorithms Group, which, according to some lawyers, raise similar legal questions.
The Appeals Chamber’s reasoning on aggravated fraud and criminal organization is also likely to influence these proceedings. By explicitly valuing the total harm caused and the systemic nature of the deception, the court sets a benchmark for how Spanish judges might approach large-scale crypto scams, where thousands of small contributions add up to enormous losses. The stress placed on organisational structures and the distribution of roles could also make it easier to apply the criminal organization offence in other multi-actor schemes.
Looking ahead, several of the lawyers involved expect the defence teams to file cassation appeals before the Supreme Court. Given the novelty and relevance of the issues at stake, they consider it highly likely that the Supreme Court will agree to hear the case, which would allow Spain’s highest criminal court to lay down guidelines that may shape the treatment of crypto-based pyramid schemes for years to come.
The Arbistar case thus stands at a crossroads between traditional criminal law principles and the evolving reality of digital finance. With its decision to double the sentences, apply the aggravated fraud subtype and recognise the existence of a criminal organization, the National Court has delivered a strong response to one of the most notorious crypto scams seen so far in Spain, while also offering legal criteria that can be applied to the wave of similar cases now reaching the courts.
