Group arrested in US over bitcoin scam allegations
A group of men in the US have been taken into custody following claims that they perpetrated a cryptocurrency scam which may have seen $722m in value stolen.
The alleged scam, which was known as the “BitClub Network”, is accused of actually being a Ponzi scheme designed to lure in traders and investors and then get them to recruit more people.
In a statement, the US Justice Department said that the men were arrested across the US.
Matthew Brent Goettsche was taken into custody in his native Colorado, while Jobadiah Sinclair Weeks was arrested in Florida.
Joseph Frank Abel, meanwhile, was arrested in California.
According to Craig Carpenito, who is a US Attorney, the trio were running a “high-tech Ponzi scheme”.
“The indictment describes the defendants’ use of the complex world of cryptocurrency to take advantage of unsuspecting investors”, he said.
“What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars.
“Working with our law enforcement partners here and across the country, we will ensure that these scammers are held to account for their crimes.”
The crimes are alleged to have taken place across the course of five years between April 2014 and the current month.
According to court documents, Goettsche claimed to be “building this whole model on the backs of idiots”.
They are also accused of trying to sell off shares in BitClub Network – despite not having registered the sale of the shares with the relevant authority, the US Securities and Exchange Commission.
Paul Delacourt, the assistant director in charge of the FBI’s Los Angeles Field Office, claimed that the trio “allegedly made hundreds of millions of dollars”.
“Those arrested today are accused of deploying elaborate tactics to lure thousands of victims with promises of large returns on their investments in a bitcoin mining pool, an advanced method of profiting on cryptocurrency”, he said.
“The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims’ money lavishly.”
Police in Brazil shut down firm over alleged fraud
Law enforcement authorities in Brazil have closed down a firm which they accuse of running a scam bitcoin scheme.
Authorities in the state of Paraná claim that police raided a firm last week following an investigation which took four months to complete.
The firm involved has not been named, although some details have been shared.
It supposedly told up to 5,000 people that the returns on their investments could be very high – and that it could grow by 4% every day.
It is understood that a large part of the firm’s outreach occurred through social media.
Once people attempted to take their cash out, however, it was uncovered that the money was long gone.
Charges of fraud and other crimes have now been filed.
- What Does Binance Being Kicked Out of Belgium Mean for Crypto Prices?
- Crypto Traders and Coin Prices Face New Challenge as Binance Gives up its FCA Licence
- Interpol Declares Investment Scams “Serious and Imminent Threat”
- Annual UK Fraud Audit Reveals Scam Hot-Spots
- Former Schwab, Wells Fargo, and Morgan Stanley Advisor is Sentenced to Seven Years
- FX Fraudster On The Run After £70m Ponzi Scheme Collapses
What Does Binance Being Kicked Out of Belgium Mean for Crypto Prices?
Safest Forex Brokers 2023
|Broker||Info||Best In||Customer Satisfaction Score|
|#1||72% of retail CFD accounts lose money. Founded: 2014||Global Forex & CFD Broker||
Best Trading Conditions Visit broker
|#2||Your capital is at risk Founded: 2014||Global Forex Broker||
BEST SPREADS Visit broker
|#3||Your capital is at risk Founded: 2006||Globally regulated broker||
BEST CUSTOMER SUPPORT Visit broker
|#4||82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008||Global CFD Provider||
Best Trading App Visit broker
|#5||Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010||Global Forex Broker|
|#6||76% of CFD traders lose money Founded: 2007||Global CFD & FX Broker||
ALL-INCLUSIVE TRADING PLATFORM Visit broker
|#7||Your capital is at risk Founded: 2009, 2015 and 2017||Global Forex Broker|
|#8||Your capital is at risk Founded: 2006||CFD and Cryptocurrency Broker||
CFD and Cryptocurrency Visit broker
Forex Fraud Certified Brokers
Stay up to date with the latest Forex scam alerts
Sign up to receive our up-to-date broker reviews, new fraud warnings and special offers direct to your inbox