Three Americans Arrested Over Crypto Ponzi Scheme

Suzat

December 11, 2019 11:40 pm

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New Jersey police have arrested three men who are accused of defrauding investors of over $722 million as part of the alleged crypto Ponzi scheme BitClub Network. Recently the Department of Justice announced that three men have been taken under custody.

The announcement stated that BitClub Network promised huge rates of return in exchange for investments in a shared cryptocurrency mining pool. The firm allegedly misappropriated over $722 million of those funds into their own lavish living rather than the promised mining pool. 

The three arrested suspects are Matthew Goettsche and Jobadiah Weeks (from Colorado) and Joseph Abel of California. Authorities are charging the first two suspects 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 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.

In 2016, crypto news outlet 99Bitcoins warned against investing in BitClub, despite removing an earlier “scam” label from the company. 

The author, Ofir Beigel, explained: 

“After gathering the facts I can’t prove that Bitclub network is a scam beyond a shadow of a doubt. I do however still think that Bitclub Network’s business model is lacking and wouldn’t invest in it personally.”

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