BitClub Network is said to have struck 722 million US dollars

The US Attorney's Office has filed charges against BitClub Network operators. Because the five men are said to have operated with their platform a large-scale pyramid scheme. According to the indictment, the alleged crypto-scammers so captured $ 722 million from the pockets of ignorant investors.

According to the relevant prosecutor, the BitClub Network was operational from April 2014 to November 2019. Customers were able to buy shares in alleged Bitcoin Mining Pools on the website. These pools were apparently nonexistent; instead, the alleged fraudsters are said to have lured investors into giving false returns. The group also did not register the shares sold with the US Securities and Exchange Commission. Finally, investors also received rewards for recruiting additional customers.

Pyramid system built "on the backs of idiots"

For the just outlined "business model", the relevant prosecutor Craig Carpenito found clear words:

What they allegedly did is little more than a modern, high-tech pyramid scheme that has cheated the victims by hundreds of millions of dollars.

Such pyramid schemes are one of the best known forms of fraud, they are also frequently used in crypto-scams. The principle is very simple: After attracting investors with false promises, operators are encouraging them to actively recruit new financiers. The whole thing potentially continues indefinitely, with each new investor returning money in the pyramid.

The fact that the BitClub was based on this principle alone implies the statements of the operators. In an internal e-mail filed with the prosecutor's office, one of the men said they had built the business model "on the backs of idiots." The operators themselves operated an active advertising campaign for which they even made videos. In order to spread the crypto-scam, one of the operators should also travel across the US and the world.

If these allegations prove true, the defendants face up to 20 years imprisonment and a fine of up to $ 250,000. Four of the five men are already in police custody, the arrest of the last is currently pending.

BitClub in "best" society

Meanwhile, the fact that the crypto world attracts scammers is nothing new. This year, especially the affair of the supposed cryptocurrency OneCoin made headlines. Even this was probably a pyramid scheme. In this case, OneCoin would be the biggest crypto-scam of all time, finally taking the operators with an astronomical four billion US dollars.

In the US, however, the first lawsuits were already going against the masterminds. While some of them have already been sentenced to prison terms, Founder Ruja Ignatova, known as Cryptoqueen, remains at liberty. Your current whereabouts are unknown.