At the request of the Federal Trade Commission (FTC), the U.S. District Court for the Southern District of Florida has halted the activities of four individuals who allegedly promoted deceptive money-making schemes involving cryptocurrencies. These schemes falsely promised participants they could garner huge returns by using cryptocurrencies such as Bitcoin or Litecoin to enroll themselves and others.

In a complaint, the FTC alleges that four defendants — Thomas Dluca, Louis Gatto, Eric Pinkston, and Scott Chandler — promoted the chain referral schemes called Bitcoin Funding Team, My7Network, and Jetcoin. Using YouTube videos, social media, and conference calls, the defendants promised big rewards for small payments of Bitcoin or Litecoin. The FTC alleges, however, that the structure of the schemes ensured that few would benefit — and that, in fact, the large majority of participants would fail to recoup their initial investments.

Bitcoin Funding Team, My7Network, and Jetcoin

Two of these schemes — Bitcoin Funding Team and My7Network — required people to use Bitcoin or Litecoin to pay for the right to recruit others into the schemes. There was no product or service to sell, people were simply told to pay in and recruit other people into the program. Supposedly, the more cryptocurrency people paid in, the more they would make. The FTC alleges that these programs were “illegal chain referral schemes.”

“This case shows that scammers always find new ways to market old schemes, which is why the FTC will remain vigilant regardless of the platform – or currency used,” said Tom Pahl, Acting Director of the FTC’s Bureau of Consumer Protection. “The schemes the defendants promoted were designed to enrich those at the top at the expense of everyone else.”

The FTC alleges that a fourth defendant, Scott Chandler, promoted Bitcoin Funding Team and another deceptive cryptocurrency scheme, Jetcoin. Similar to the other two, Jetcoin also promoted a recruitment scheme but also promised investors a fixed rate of return on their initial Bitcoin investments as a result of Bitcoin trading. In a series of promotional calls, Chandler claimed Jetcoin participants could double their investment in 50 days. In reality, the FTC complaint alleges, the scheme failed to deliver on these claims and ceased operation within two months of launching.

In its complaint, the FTC charged that the defendants violated the FTC Act’s prohibition against deceptive acts by misrepresenting the chain referral schemes as bona fide money-making opportunities and by falsely claiming that participants could earn substantial income by participating in the schemes. As requested by the FTC, the court has issued a temporary restraining order and frozen the defendants’ assets pending trial.

These types of complaints have been popping up much more frequently as of late. This year has seen the U.S. Securities and Exchange Commission hitting cryptocurrency and blockchain based technology companies with subpoenas and demands for information in a widespread effort to control fundraising and weed out bad players. The CFTC has also been issuing warnings against similar crypto-related fraud schemes called pump and dumps.

This article is originally written and posted on https://www.newsbtc.com/2018/03/16/ftc-halts-activities-four-floridians-involved-crypto-related-chain-referral-schemes/.  Visit https://www.newsbtc.com/ today for all Crypto News and Information.

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