In August of 2018, we authored an article titled Bitclub Network Is Running A Large Scale Bitcoin Mining Pool And They’re Now In Harare. Invest At Your Own Risk. 15 months later, 3 men connected with BitClub have been arrested for allegedly defrauding investors out of US$722 million.
A number of people in the comments section at the time defended BitClub Network but it turns out the organisation was as shady as we suspected. The 3 – Matthew Goettsche, Jobadiah Weeks and Joseph Abel have been charged with conspiracy to commit wire fraud with Abel also being charged with offering and selling unregistered securities.
Goettsche is said to have told his co-conspirators the people they targeted were “dumb” “sheep” and he was “building this whole model on the backs of idiots.”
US Attorney Craig Carpenito equated BitClub to a high-tech Ponzi scheme:
What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars. Working with our law enforcement partners here and across the country, we will ensure that these scammers are held to account for their crimesUS Attorney Craig Carpenito
Bitclub was in operation from April 2014 through December 2019 and the 3 men who are being charged could face sentences of upto 20 years for wire fraud and 5 years for selling unregistered securities respectively.
Beyond just affecting the investors who were part of the scheme, this and other cryptocurrency scams affect the long term perception of cryptos with too many of them ending disastrously and not offering the heralded protection from central authorities that was promised when the crypto craze kicked off…