Cryptocurrency News Today – Top Headline for Cryptocurrencies December 11th 2019

More Financial Firms are open to Cryptocurrency trading
  • Five con men charged in a supposed $722 cryptocurrency Ponzi scheme

Five men were recently apprehended on Tuesday in connection with the Federal prosecutors called a profitable cryptocurrency project that conned investors out of $722 million in a business structure that one of the perpetrators declared as created “on the backs of idiots.” One of the suspected connivers had this to say about the scheme: “We are building this whole model on the backs of idiots.”

The 27-page charge, opened in U.S. District Court in Newark, New Jersey, mentions Matthew Brent Goettsche, 37, of Lafayette, Colorado; Jobadiah Sinclair Weeks, 38, of Arvada, Colorado; and Silviu Balaci, whose age and dwelling was not instantly known, as part of a plot to commit internet fraud. They were also charged with plot to offer and sell unregistered securities.

The U.S Attorney on the case, Craig Carpenito stated that: “What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars.” The Prosecuting attorney claim that BitClub Network, which ran from April 2014 to this month, was created on seeking money from individuals in exchange for shares of supposed cryptocurrency mining pools and on rewarding investors for bringing in new clients. The group did not register shares sold with the U.S. Securities and Exchange Commission, the charge claims.

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To strengthen their business, Goettsche, Weeks and others collaborated to seek investments by presenting false and ambiguous figures described as “bitcoin mining earnings,” prosecuting attorney claims. Going further, Weeks and a fourth man, Joseph Frank Abel, 49, of Camarillo, California, developed videos and traveled around the country and the world to sponsor BitClub Network, labeling their firm as “the most transparent company in the history of the world that I’ve ever seen” and “too big to fail.”

Though the court documents show that there were loopholes. Weeks mentioned in an email to Goettsche and another alleged conniver in June 2017 that BitClub’s selling shares and not using the money to buy mining equipment were “not right.” Four of the men were arranged to make court appearances on Tuesday. Authorities also are seeking a fifth man, whose identity was redacted pending his arrest.

If found guilty, the defendants will face maximum penalties of 20 years in prison and fines close to $250,000 on the fraud conspiracy count. The charge of conspiracy to sell unregistered securities carries a maximum sentence of five years with a $250,000 fine.

Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.


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