US Trade Regulator Shuts Down Crypto Investment Scheme Promoters

A U.S. district court has issued a restraining order against four individuals accused of operating a string of cryptocurrency investment schemes.

AccessTimeIconMar 16, 2018 at 6:25 p.m. UTC
Updated Sep 13, 2021 at 7:42 a.m. UTC
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A U.S. district court in Florida has issued a temporary restraining order against four individuals accused of operating a string of cryptocurrency investment schemes following a request from the Federal Trade Commission.

The agency announced Friday that three of the four defendants – Thomas Dluca, Louis Gatto, and Eric Pinkston – were involved in two referral schemes, Bitcoin Funding Team and My7Network. A complaint dated February 20 and unsealed today alleged that they promised would-be investors major returns if they made initial payments in cryptocurrency, mentioning bitcoin and litecoin specifically.

"The defendants claimed that Bitcoin Funding Team could turn a payment of the equivalent of just over $100 into $80,000 in monthly income. The FTC alleges, however, that the structure of the schemes ensured that few would benefit. In fact, the majority of participants would fail to recoup their initial investments," the agency said.

A fourth named defendant, Scott Chandler, was accused of promoting Bitcoin Funding Team as well as another alleged scam called Jetcoin. Like the others, Jetcoin was pitched as a money-making enterprise to investors but failed to yield the promised results prior to its collapse.

According to the FTC, the assets of the four defendants have been frozen pending a formal trial.

"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. The schemes the defendants promoted were designed to enrich those at the top at the expense of everyone else," Tom Pahl, acting director of the FTC Bureau of Consumer Protection, said in a statement.

The full complaint can be found below:

FTC seal image via Shutterstock

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