The Bitcoin craze has some individuals overlooking the old saying, “when the deal is too good, think twice.” Such ignorance has led con artists to use that gullibility for personal gain. In March 2018, the Federal Trade Commission announced that it had put a stop to the actions of four people who allegedly controlled get-rich-quick crypto schemes. Victims were promised huge returns in exchange for a small fee of Litecoin or Bitcoin.
Thomas Dluca, Eric Pinkston, and Louis Gatto are accused of operating pyramid schemes known as My7Network and Bitcoin Funding Team. Through their YouTube videos, websites, conference calls, and social media handles, the group supposedly declared that they could change the sum of $100 to $80,000 in 30 days. This was according to the Federal Trade Commission.
For targets to join the programs, they were required to make an introductory Bitcoin payment. After that, they were urged to commence making revenue by enlisting recruits and convincing them to submit the initial fee. Instead of collecting the Bitcoin as they presumed, the majority of the victims were not capable of recouping their initial investment, said the FTC. Acting director Tom Pahl of the FTC’s Consumer Protection Bureau said that the case displayed how con artists always find means of marketing old tricks.
Unlike Nakitcoins and other legitimate organizations that deal in cryptocurrency trading, this trio of scammers acted as wolves in sheep’s skins. A fourth offender, Mr. Chandler, marketed Bitcoin Funding Team and another crypto pyramid scheme referred to as Jetcoin. Chandler assertedly assured his clients that he could “multiply their investments” in two months through the Bitcoin exchange. The FTC further stated that the project failed to meet its promises and halted activities within eight weeks of commencing.
The FTC states that the accused broke the law by falsifying the chain referral program as bona fide money-making chances and by dishonestly assuring that participants could make a plentiful income. As a result of these allegations, a federal court granted the FTC’s request to restrain and freeze the defendants’ accounts temporarily.
On May 21, 2019, Brazilian police arrested ten men suspected to be running a cryptocurrency pyramid program worth $210 million. As part of an operation to unmask financial schemes, Brazil’s tax agency assisted the law enforcement. They organized an investigation on the numbers behind Indeal, who is accused of amassing money from 55,000 victims.
Bearing the qualities of a financial pyramid, confiscation of property belonging to the numbers involved exposed that Indeal wouldn’t be capable of facilitating withdrawals from all of its investor instantly. They also used the money to cater to luxury goods, including precious stones and 30 vehicles.
Cryptocurrency use is not illegal, but due to the lack of in-depth knowledge in the trade, many investors are falling victim to financial schemes. Since cryptocurrency makes criminals harder to catch, more criminal masterminds are likely to exploit this financial sector.
Take caution when dealing with crypto and do not be too quick to invest in get-rich-quick programs.
Cryptocurrency Fraud Alert Image by mohamed Hassan from Pixabay.
All scammers can be easily traced from KYC which is required by the acquirer Banks and financial institutions to apply in order to process the money from the customers to the scammers accounts.
Visa and MasterCard are aware about all fraud disputes and they should co-ordinate with the Authorities.