The US Federal Trade Commission has raised a scam alerts Bitcoin Funding Team and My7Network, two cryptocurrency Ponzi schemes.
In an email message sent out by the FTC, said Bitcoin Funding Team and My7Network required people to use bitcoin or Litecoin to pay for the right to recruit others into the schemes and get paid recruitment rewards in cryptocurrency. There was no product or service to sell. People were 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.
Apparently, there is a third program — Jetcoin — claimed that people could invest bitcoin in the program and see it double within a short period of time, supposedly because there were cryptocurrency traders working behind the scenes.
The FTC said it has received a complaint against the alleged perpetrators of the scam. They are four people — Thomas Dluca, Louis Gatto, Eric Pinkston, and Scott Chandler — for promoting deceptive cryptocurrency schemes online. The schemes were promoted through websites, YouTube videos, blogs, and recorded conference calls telling people they could earn big bucks in a short time and achieve financial freedom.
As a typical exit scam, Jetcoin shut down after only a few weeks and participants lost their bitcoin investments.
The FTC sent out an explicit warning to the public saying:
“Don’t be fooled by bitcoin buzz. Whether you’re asked to pay in dollars or cryptocurrency, promises of free money, mysterious financial models, and outsized returns most likely are scams. Learn more about what to watch out for with business and investment opportunities”.