[2019-11-12] BitClub Network's $722 million Ponzi Scam Arrested

[Aveatrex]

United States authorities in New Jersey have announced the arrest of three men who are accused of defrauding investors of over $722 million as part of alleged crypto ponzie scheme BitClub Network, per a Dec. 10 announcement from the Department of Justice.

[...]


The three accused are Matthew Goettsche and Jobadiah Weeks — both from Colorado — and Joseph Abel of California. Authorities are charging the first two with conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, as well as conspiracy to offer and sell unregistered securities. Abel, who was apparently less central to the scheme, has only been charged with conspiracy to offer and sell unregistered securities, a charge that carries a maximum prison term of 5 years.

source:https://cointelegraph.com/news/three-men-arrested-for-running-alleged-722-million-crypto-ponzi-scheme
           https://cointelegraph.com/news/onecoin-website-goes-offline-as-net-closes-in-on-4b-ponzi-scheme

$722 million is really huge, judging from their website it's a classic ponzi scheme impersonating a cloud mining network,but actually don't have any miners and promise huge returns on investments.Also, OneCoin website was taken down recently, it seems that cryptocurrency scams are getting targetted these days,what do you think?

[figmentofmyass]

wow, i've been seeing their name in bitcoin's hash rate distribution for years, since 2014. there was always something fishy; even their name sounded like a scam. but having a respectable share of the hash rate gave them an air of legitimacy. people have apparently been warning about them for years, i just never noticed. https://99bitcoins.com/anatomy-bitcoin-scam-bitclub-network-analyzed/

it sounds like a ponzi scheme built on top of an MLM/referral scheme. rising bitcoin prices probably allowed them to sustain the scheme for so many years even though they were continuously looting investor funds.

[bbc.reporter]

@Aveatrex. What do you think? It is just another day in the cryptospace. Everyone move along hehehe.

[Getmon]

Ponzis built on Bitcoin or crypto is an easy sell nowadays. Thanks to the growth and popularity of the technology, scammers don't have a hard time marketing or promoting them. Hundreds of millions of USD are gathered from innocent individuals due to their lack of proper and thorough knowledge about Bitcoin or crypto. 20 years should be increased for these scammers. I hope the money will be recovered down to the last cent and be returned to their victims.

[1Referee]

Hundreds of millions of USD are gathered from innocent individuals due to their lack of proper and thorough knowledge about Bitcoin or crypto. 

You can't fix stupid. People are at a stage already where they know that it is a scam, or at least likely scam, but they don't care.

All people care about is that net passive gain in their account. Funny part is that they aren't actually gaining anything because they are so stupid that they reinvest every single payout. It means that the profit margins of these scams are much higher than people think. The same applies to cloud mining where people continuously reinvest their payouts. Fools.

[Thekool1s]

You can't fix stupid. People are at a stage already where they know that it is a scam, or at least likely scam, but they don't care.

I kinda disagree. Majority of people ain't stupid but are rather misinformed/uneducated and TBH I don't blame them. When you are constantly bombarded with stories of rags to riches from cryptos and stock investments. People become an easy target. Lacking the technical knowledge behind the Cryptos and the Machine learning/AIs is one of the major reasons why Scams like these exist. It's basically Presented as a "magic tool" for them from what they have read and seen online. Stupidity is when they know the technical knowledge behind all this but yet still fall for it. I don't think majority of people who fall for these scams even know basic Computer handling knowledge. Cryptos is a different dimension altogether for them.

[Harlot]

You know the funny thing about this is even if they have arrested three of them the website for BitClub network is still up and running which I may say is a careless thing to be left out by the authorities. What are they actually waiting for? To have more victims to the count or to add more money on top of the 722$ stolen? If this was a movie streaming or a torrent website this would be quickly shut down because of the pressure from other people ordering them to do so, but when it's about sites that only affects us citizens they won't really act quickly about it or at least have a similar treatment on the same thing.

[cr1776]

Hundreds of millions of USD are gathered from innocent individuals due to their lack of proper and thorough knowledge about Bitcoin or crypto. 

You can't fix stupid. People are at a stage already where they know that it is a scam, or at least likely scam, but they don't care.

All people care about is that net passive gain in their account. Funny part is that they aren't actually gaining anything because they are so stupid that they reinvest every single payout. It means that the profit margins of these scams are much higher than people think. The same applies to cloud mining where people continuously reinvest their payouts. Fools.

Ponzi schemes by name have been around for nearly 100 years and similar scams (not called Ponzi schemes) for 1000s of years.  If it sounds too good to be true, then it probably is too good to be true.  1% per day or 10% per month is a scam. 

The thing is though, there is a sucker born every minute and people want a quick buck without any effort or work.  As long as the get rick quick, something for nothing attitude is prevalent, it will continue happening.

[IconFirm]

This blatant scam was spotted by forum member tmfp over 3 years ago:

https://bitcointalk.org/index.php?topic=1152263.0

US prosecutors would have had all the evidence they needed to stop this scam years ago if they had the detective skills to read BCT.....lol

[dunfida]

@Aveatrex. What do you think? It is just another day in the cryptospace. Everyone move along hehehe.

Do people still got shock to these kind of news? I guess not. People been warned for how many times but they are hardheaded enough not to mind those basic advises and what comes next is
a pile of people who whine and get angry because they've been scammed. 

[CryptoBry]

$722 million is really huge, judging from their website it's a classic ponzi scheme impersonating a cloud mining network, but actually don't have any miners and promise huge returns on investments. Also, OneCoin website was taken down recently, it seems that cryptocurrency scams are getting targeted these days, what do you think?

Actually, many governments are always watching many ponzi schemes especially those using the name and pretense of cryptocurrency or in the case of the Bitclub Network supposed bitcoin mining which of course is just a big lie. I had been  invited to this program almost two years ago but since I was convinced that it is just another pyramiding program I declined. I am in fact surprised that it took too long for authorities to act on this case. My heartfelt condolence to all people who are victims of this another popular scam. I think the message here is quite clear: it is about time that we in the world of cryptocurrency should stand clear and strong on many scams that are affecting all of us in one way or another.

[bbc.reporter]

@Aveatrex. What do you think? It is just another day in the cryptospace. Everyone move along hehehe.

Do people still got shock to these kind of news? I guess not. People been warned for how many times but they are hardheaded enough not to mind those basic advises and what comes next is
a pile of people who whine and get angry because they've been scammed. 

 

I reckon some of these news are not for the cryptospace followers and forum cave trolls like us who have seen it all hehe. It might be for everyone else to get more clicks.

[Getmon]

Hundreds of millions of USD are gathered from innocent individuals due to their lack of proper and thorough knowledge about Bitcoin or crypto. 

You can't fix stupid. People are at a stage already where they know that it is a scam, or at least likely scam, but they don't care.

All people care about is that net passive gain in their account. Funny part is that they aren't actually gaining anything because they are so stupid that they reinvest every single payout. It means that the profit margins of these scams are much higher than people think. The same applies to cloud mining where people continuously reinvest their payouts. Fools.

Ponzi schemes by name have been around for nearly 100 years and similar scams (not called Ponzi schemes) for 1000s of years.  If it sounds too good to be true, then it probably is too good to be true.  1% per day or 10% per month is a scam. 

The thing is though, there is a sucker born every minute and people want a quick buck without any effort or work.  As long as the get rick quick, something for nothing attitude is prevalent, it will continue happening.

I am not sure if it is only stupidity that is the problem in here. Perhaps it is a combination of different factors. There is a problem for sure in the individual victim himself. One could be that foolish or he is simply greedy that he does not care about the risk because the return promised is very enticing. It is also a factor that schemes like these are growing in numbers and not detected much earlier. There must be a failure on this somewhere. Thus the hundreds of millions of money siphoned out from the thousands of investors before the detection and the intervention took place.

[hv_]

This blatant scam was spotted by forum member tmfp over 3 years ago:

https://bitcointalk.org/index.php?topic=1152263.0

US prosecutors would have had all the evidence they needed to stop this scam years ago if they had the detective skills to read BCT.....lol

Yes - I really wonder why such things take so long. Regulators / anonymous involved ?

>> Anonymtiy only helps the big fishes - incl govs and regs !

[eaLiTy]

You can't fix stupid. People are at a stage already where they know that it is a scam, or at least likely scam, but they don't care.

I kinda disagree. Majority of people ain't stupid but are rather misinformed/uneducated and TBH I don't blame them. When you are constantly bombarded with stories of rags to riches from cryptos and stock investments. People become an easy target. Lacking the technical knowledge behind the Cryptos and the Machine learning/AIs is one of the major reasons why Scams like these exist.

I completely disagree with this as people should understand the basics on what they are investing, you can hear thousands of rich to rags story but for that you do not entrust a third person to make you rich, you seize the opportunity in a market and invest rather than searching for some shady businesses that promise you to make you rich. You do not need to have technical knowledge to understand a scam, just use your common sense .

[onceuponatime]

"Goettsche discussed with his conspirators that their target audience would be ‘dumb’ investors, referred to them as ‘sheep,’ and said he was ‘building this whole model on the backs of idiots.”
http://www.idahoreporter.com/2019/three-americans-arrested-in-722m-crypto-ponzi-scheme/