The U.S. Federal Trade Commission is refunding about 8,000 victims who lost money from investing in two bitcoin scams. The fraudulent schemes promised that investors could turn their cryptocurrency payments of about $100 into $80,000 in monthly income.
Bitcoin Pyramid Schemes’ Victims Get Refunds
The Federal Trade Commission (FTC) has started sending refunds to victims of two cryptocurrency investment scams: Bitcoin Funding Team and My7network.
According to an announcement by the FTC on Wednesday, the two schemes “falsely promised that participants could earn large amounts of money by paying cryptocurrency such as bitcoin or litecoin to enroll in the schemes.” However, the FTC detailed:
Bitcoin Funding Team and My7network were chain referral schemes that depended on the recruitment of new people to make money. In fact, most participants failed to recoup their initial investments.
The FTC is sending 7,964 refunds through Paypal totaling more than $470,000 to victims of the two schemes beginning on Nov. 5. “The average refund is approximately $59. Recipients who receive a refund via Paypal will have 30 days to accept the payment,” the FTC clarified.
The promoters of the two schemes — Thomas Dluca, Louis Gatto, and Eric Pinkston — were shut down in March 2018. They claimed that Bitcoin Funding Team “could turn a payment of the equivalent of just over $100 into $80,000 in monthly income,” the FTC explained, adding that the two schemes were “chain referral schemes — a type of pyramid scheme.”
The FTC alleges that a fourth defendant, Scott Chandler, promoted Bitcoin Funding Team and another deceptive cryptocurrency recruitment scheme called Jetcoin. This scam claimed that investors could double their investment in 50 days, but the FTC says “the scheme failed to deliver on these claims and ceased operation within two months of launching.”
The defendants violated the FTC’s “Act’s prohibition against…