FTC Settles with Crypto Pyramid Scheme Promoters for $500,000

The United States’ Federal Trade Commission (FTC) has settled charges against four promoters of a crypto multi-level marketing (MLM) investment scheme.

According to an announcement made by the commission last week, all four promoters were ordered to pay restitution for their misdeeds and are barred from operating or participating in any other scheme of such nature.

The four promoters - Thomas Dluca, Eric Pinkston, Louis Gatto, and Scott Chandler - were promising huge returns to investors in two schemes named Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term Funding Team and My7Network.

They also heavily promoted both schemes using online advertisements, social media platforms, YouTube, and conference calls. The schemes promised a return of $80,000 per month for investment as little as $100.

Similar to classic pyramid schemes, the investors were also encouraged to recruit more participants in the investment scheme to receive lucrative rewards.

The watchdog agency also alleged that Chandler, in addition to both MLM schemes, also promoted Jetcoin and assured investors of a “fixed rate of return” for their investments.

Agencies' quest against fraud schemes

The shady schemes alarmed the commission last year, which prompted it to obtain a court order in March 2018 to stop the marketing practices of the MLM scheme and froze the assets of the promoters.

The Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term ordered Dluca to pay $453,932, while the penalty for Chandler was set at $31,000. Though Pinkston was also ordered to pay $461,035, the penalty will be suspended upon payment of $29,491, due to his inability to pay the full amount.

In addition to the penalty, all four promoters are permanently prohibited from “operating, participating in, or assisting others in promoting or operating any multi-level marketing program, pyramid, Ponzi, or chain referral scheme.”

The commission approached the district court of the Southern District of Florida with the proposed order.

Earlier this month, the securities market watchdog in the US settled with illegal crypto investment scheme of PlexCoin against the payment of $7 million in total by the promoters and the company.