The cryptocurrency market has been abounding with scams and frauds for a long time now, and millions of people have suffered from it. Despite the reduced occurring of these events now, one or two never fail to shock the crypto world. Just recently, the BitClub Network [BCN] and its five top members were found to be in hot water after cheating investors off $722 million.
The BCN had promised its investors that their money would be used to purchase mining equipment, and once they start producing Bitcoin, the investors would get a cut too. Federal prosecutors in the United States have taken multiple angles to analyse this case and concluded that it was a “high tech plot” in the “complex world of cryptocurrencies”.
The company even gave rewards to existing investors in exchange for recruiting others to join; a model made famous by the pyramid and Ponzi schemes. Revelations from reports showed that the founders [Matthew Brent Goettsche, Jobadiah Sinclair Weeks, and Silviu Catalin Balaci] had blatantly taken advantage of ill-informed investors and even called them “dumb” and “sheep.”
Some users in the space had first spotted discrepancies in the BCN ecosystem, with Japhet Mesa from Zambia being a major whistleblower. In a Medium post, Mesa had claimed:
“Unlike actual mining sites like Genesis Mining (please distinguish between miners and pool miners), the BCN website does not state who the owners or people behind the operations are. In fact, the website states vaguely that “BitClub is not owned by any single person or entity, we are a team of experts, entrepreneurs, professionals, network marketers, and programming geeks who have all come to together to launch a very simple business around a very complex industry”
The victims were still not identified, but the range of the company is far and wide. An advert was spotted on the Ben Franklin Technology Partners website where people were offered a “Founder” status for people who agree to purchase its mining pools.
Scams and frauds have been prevalent in the cryptocurrency space, especially since the 2017 Bitcoin boom. Since then, significant issues have rocked the crypto world, which was spread across the planet. A precursory analysis showed that countries such as the United States, Japan and some European countries where hotspots for scammers to capitalise on innocent citizens.
During the beginning of this year, investors in Hong Kong had claimed that they had lost almost HK$3 million in a crypto promoter stunt. The investors, aged between 20 and 50 suffered losses between HK$20,000 and HK$1 million each.
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