Five people have been charged with defrauding investors of $722 million, using promises of huge returns if they joined a cryptocurrency investing club while privately deriding their clients as “sheep” and “idiots,” the United States attorney’s office in New Jersey said on Tuesday. Federal prosecutors said the defendants operated BitClub Network, a bogus investing scheme that they promoted in videos and in domestic and international trips as “the most transparent company in the history of the world” and “too big to fail.”The network asked investors to join a pool to share in the earnings from Bitcoin mining, in which people race to unlock new Bitcoin by solving complex algorithms and verifying cryptocurrency transactions on a public ledger. The network said that it would invest in the hardware necessary to do the complex math and that its investors would reap the rewards, much like investors in a gold-mining operation. “You’re not going to go start digging holes — the gold miners dig up the gold, they just give you your gold every single day,” one BitClub Network video says, according to federal court documents. “This is the same kind of thing.”

Source: International New York Times December 11, 2019 20:57 UTC