Cryptocurrencies, such as Bitcoin are legitimate, but scammers are increasingly taking advantage of the public’s fascination with cryptocurrencies to take old forms of scams and update them with a cryptocurrency twist.   I have been writing about cryptocurrency scams here at Scamicide for more than six years.  The perception of many in the public that cryptocurrencies offer an easy path to riches coupled with many people violating the cardinal rule of investing by investing in schemes that they do not understand creates a perfect storm for cryptocurrency scams.

In 2018 I reported to you about the Federal Trade Commission (FTC) initiating legal action against four men who had been promoting deceptive money making schemes involving cryptocurrencies. The four men, Thomas Dluca, Louis Gatto, Eric Pinkston and Scott Chandler also had their assets frozen while the case against them proceeded.  Dluca, Gatto and Pinkerton using the names Bitcoin Funding Team and My7Network used websites they constructed, YouTube videos, social media and conference calls to promote a scheme through which investors were told that by investing $100, they could achieve $80,000 a month in monthly income. However, the scheme was nothing more than an update of the old fashioned pyramid scheme. Pyramid schemes are disguised as purported businesses; however, if you carefully evaluate the business you will see that the primary source of profit for the business is in enrolling new members who pay fees to join the business.  The only profit for investors comes from bringing more people into the scheme.  In other words, the only way you can make a profit is by becoming a scammer yourself.  Like chain letters, pyramid schemes are doomed to failure because eventually you run out of people to sustain the growth of the pyramid.  Chandler, using a similar pyramid scheme, misrepresented to his victims through his Bitcoin Funding Team that their investments would double in 50 days.

Now the FTC and the four defendants have settled the FTC’s lawsuit and as a part of the settlement, the FTC received money from the defendants which it is refunding to victims of their scams.  The refunds are being sent through PayPal and the people receiving the refunds will have 30 days to accept the payment.

TIPS

As I have mentioned many times previously, you should never invest in anything that you do not fully understand. You also should not invest in anything without investigating the people offering the investments. In addition, as always, if the investment sounds too good to be true, it usually is. Cryptocurrency scams have gotten so bad that Google no longer accept advertisements for cryptocurrency investments. Facebook also bans all advertisements promoting cryptocurrencies due to the plethora of cryptocurrency scams.

For more information about this refund program go to the tab in the middle of the Scamicide home page entitled “FTC Scam Refunds.”  It is important to note that there is never a charge for obtaining a refund through the FTC or any of its refund administrators.  Anyone who asks for such a payment is just another scammer.

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