Three men charged in $722 million cryptocurrency scam
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Answer Three men charged in $722 million cryptocurrency scam
A US prosecutor has charged three men with being involved in a $722 million cryptocurrency fraud involving a “Ponzi scheme”.
The scam dates back to 2014 and until this month, the scammers operated the BitClub network, which solicits money from investors in exchange for shares in crypto-mining pools and receives rewards for hiring new investors, according to the attorney general.
He said US Attorney Craig Carpinito in New Jersey said in a statement that Matthew Brent Goetesche, 37, Gobadia Sinclair Weeks, 38, and Joseph Frank Appel, 49, were arrested on Tuesday and charged with conspiracy.
There are two other defendants, whose names have not been released, and who have not yet been arrested.
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Goetsche referred to potential BitClub network investors as “idiots” and a “sheep bunch,” adding that he “built this model entirely on the backs of idiots,” according to the statement.
In September 2017, Goetsche sent an email to one of his co-conspirators suggesting that BitClub would allow him to “retire early”.
Goetsche and Weeks are charged with conspiracy to commit fraud, while the three men face charges of conspiracy to sell unregistered securities.
Cryptocurrency obsession:
It is not possible to determine who the attorneys represent the three defendants.
“Carpineto” said in the statement that they are expected to appear in court next Tuesday.
Bitcoin mining is a process by which miners can earn newly issued bitcoins using special software to solve complex algorithms.
BitClub claimed to pool investors’ money to buy mining hardware to improve processing power and then distribute profits.
Prosecutors said the group reported false profits and deceived its investors.
As a reminder, the US Attorney General also brought the OneCoin fraud case in which a New York lawyer was convicted three weeks ago of laundering $400 million of fake OneCoin cryptocurrency, which operates as a Ponzi scheme, promising investors unrealistic returns, and early investors are paid to subsequent investors.
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Read also:
Brazilian police stop a crypto fraud scheme that caused the theft of 1.5 billion Brazilian riyals
Several Chinese nationals arrested in Thailand, suspected of being involved in crypto scams
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