fbpx
Business & Finance

Crypto Ponzi Scheme Netted $722 Million Worth Funds

Although the crypto market is testing the patience of investors and crypto enthusiasts all over the world, crypto scams and ponzi schemes continue to destroy the repute of cryptos by robbing people. In the latest, bad actors behind the scheme dubbed BitClub Network frauded people and successfully bagged about $722 million worth funds.

According to the release published by the Department of Justice, there were about three people behind the BitClub Network. They trapped different people by offering them massive returns in return for their investments. But, rather than investing the funds collected from the investors, funds were used to buy lavish leisures.

READ ALSO: Cryptocurrency Adoption: A Critical Look at the Mass Market Psyche

However, authorities in New Jersey have arrested the bad actors. The accused includes Matthew Brent Goettsche, Jobadiah Sinclair and Joseph Frank Abel. Elaborating on the wrongdoings of the aforementioned, Paul Delacourt who is the Assistant Director in Charge of the FBI’s Los Angeles Field Office told:

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. The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims’ money lavishly.

The volatile nature of cryptocurrencies in addition to possessing the risk of dropping low is capable of returning extraordinary profits and gains to the investors. The unpredictable bull run of 2018 left many investors very delighted so people investing in crypto class are keen and hopeful for earning big. According to the release, this is something that the members of BitClub Network had been offering to their customers.

Although now the conspirators operating BitClub Network had been arrested and brought into the light, this isn’t a first for them. A few years ago, it was reported that the BitClub Network wasn’t operating in good faith. At that time, the author of 99Bitcoins said:

I can’t prove that Bitclub network is a scam beyond a shadow of a doubt.

Since the development of crypto markets, unethical and fraudulent activities harming the image of cryptos are frequently tried by the bad actors in the space. For the long term success of cryptos, these illegal activities should be effectively dealt with in the near future.

READ ALSO: Bitcoin Halving Might Not Impact Bitcoin’s Price At All

Tags

Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at editor.opinions@blockpublisher.com

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Close