In the world of cryptocurrencies, fraud is a known phenomenon. After the crypto community saw several high-profile scams, the latest one is staggering by its volume – $722 million.
According to press, 3 men were charged with a $722 million cryptocurrency scam that was essentially categorized as a high-tech Ponzi scheme. This is what U.S. Attorney Craig Carpentio commented.
According to Bloomberg, the prosecutors said that from 2014 up until December, 2019, the defendants run a BitClub Network – an operation that solicited money from various investors in exchange for shares in alleged crypto mining pools. Investors also god “rewards” if they recruited new investors.
The defendants are Joseph Abel, 49, Matthew Goettsche, 37 and Jobadiah Weeks, 38. The two other defendants remain at large. What is even more shocking is the opinion of Goettsche, who referred to the defrauded investors as “sheep” and “dumb”. According to him, the entire scheme was built on the backs of “idiots”.
All of the three defendants are facing charges of conspiracy to sell unregistered securities, while Weeks and Goettsche are charged with conspiracy to perform wire fraud.
There are thousands of cryptocurrency frauds out there. While this one is definitely of huge proportions, the largest Ponzi scheme known up until now is that of OneCoin – a scheme that has defrauded thousands of investors with approximately $4 billion.