Bitclub Network started in 2014 and this week
five of their core team were arrested for wire and securities fraud.
Bitclub Network was a Ponzi scheme from the start.
They are scammers in the purest form; they created a "bitcoin mining project", sold shares in it and took the profit and investors' funds thru a Multi Level Marketing pyramid with them, the "founders", at the top.
They falsified data to appear to be profitable and made derisory payments to the "idiots" and "sheep" (as they termed their investors) from new investors' money.
Anyone who looked closely at their scheme could see this. The fact that it lasted for five years is due to a number of factors, including naive investors FOMO'd in by hi pressure salesmen, the increase in the value of Bitcoin and the lack of any oversight of crypto investment schemes.
But Bitclub Network didn't exist in a bubble. Apart from the MLM salesmen who treated crypto as the "next big thing" to mis-sell, there were a number of relationships within the growing crypto space itself, without whose complicity this fraud could not have grown to the extent that it did.
Bitclub made name dropping a marketing tool: they continually referenced BitFury, Bitmain, Genesis Mining and Roger Ver, amongst others, to position themselves as part of the "legit" Bitcoin establishment in the eyes of their newbie investors.
Let's look at the BitClub Network's relationship with Roger Ver.
TIMELINEFebruary 2016.The MLM business is full of sociopathic frauds. They lie convincingly and remorselessly. They invent, evade and dissemble.
One such animal is J. Ryan Conley, a hi profile BitClub recruiter in the early days.
He tweeted
A common MLM scammer ploy, credibility by association with established figures.... "My homie Roger Ver"
Roger, not surprisingly, took exception to this and tweeted back
Which is perfectly reasonable.
Roger isn't unintelligent, he knew how competitive mining was and understood that a project with a hugely expensive, parasitical compensation structure would be unsustainable.
He makes that frostily clear on the
CryptoShow @ 45 minutes. (Listen to Weeks' babble as much as you want to as well.)
Fast forward a year, to
March 2017.A lot has happened.
The bull run has really started and the schism between Roger and the BTC establishment is obvious. (This is a big subject, big blocks etc., and not that relevant to this thread in minutaie.
Here's a contentious primer if you want one.)
Out of the blue, comes an extraordinarily humiliating (for Roger)
You Tube video released by BitClub on
March 26.
Why would Roger do that? Recant a perfectly reasonable opinion in such a bizarre way? They even make him read it out, like some naughty kid in school being punished!
There's a big difference between a favorable first impression of a project then subsequent cynicism, and initial logical cynicism being publically withdrawn. The latter would surely require pretty concrete proof, but we now know that there's no chance of Bitclub being able to
show anyone they were legit, because it was all lies anyway.
I repeat
Why would Roger do that?Fast forward a month, to
April 26, 2017 and a
BitClub affiliate video....
Left to right: Russ Medlin, BitClub Network's top guy (the redacted name on the injunction). Roger Ver. Yoshie from Bitmain.
August 1 2017The fork.
February 1 2018Announcement from BitClub Network
(edited by me for typo)From February 1, we will only accept Bitcoin Cash (BCH) not Bitcoin (BTC), which means that you need to purchase Bitcoin cash from a stock exchange or wallet providers to register mining pools or buy. You can also convert your existing BTC to BCH, but either way it's just BCH!
We also pay ALL commissions in Bitcoin Cash!
For example, each binary cycle pays out $ 200 (about 0.013 BTC) bitcoins and the same $ 200 will be paid in bitcoin cash (about 0.08 BCH) as of February 1st. Nothing will change, you will still get exactly the same USD value for everything, but instead of being paid in Bitcoin, it will be credited to your Bitcoin Cash Wallet.
These include Binary, Level Up, Matching Bonuses, Infinity Bonuses and all other commissions. Apart from mining, profits will continue to be paid in Bitcoin (BTC) as we continue to mine on the BTC chain and use the high fees.
June 10 2018Roger Ver and his "long term friend?" Joby "1040" Weeks having a no eye contact strained chat on
You Tube. Weeks comes out with a bs story of losing $700,000 because of a slow Bitcoin transaction.
Roger looks at his feet and then
Roger asks Weeks why is it that the majority of BitClub’s hashrate goes towards Bitcoin Core, rather than BCH. Moreover, he also asked when does Weeks expect this to change.
Weeks didn’t really provide a specific answer, but instead went on to discuss operational hurdles in regards to the exploitation of BitClub’s equipment. According to him, back then, they had $50 million worth of equipment which hadn’t been plugged in. He also shared that they are expecting to create the world’s largest mining operation, harnessing over 300 megawatts of power.
Never trust a scammer, even one you're in partnership with.
Edit:
I've just read GMaxwell's Reddit post, which predates mine. No plagiarism, honest. 
