BitClub Promoter Pleads Guilty for Role in $722M Fraudulent Mining Scheme

Fifty-year-old Joseph Abel pleaded guilty to two securities and tax-related offenses Thursday due to his involvement in promoting BitClub Network, a fraudulent investment scheme worth $722 million that purported to be a cryptocurrency mining pool.

Abel admitted to selling shares of the BitClub Network’s purported mining pools without approval from the U.S. Securities and Exchange Commission. He also failed to report roughly $1 million in income that he received in exchange for his promotion of BitClub.
“Abel operated as a large-scale promoter of the BitClub Network,” according to a press release from the District of New Jersey U.S. Attorney’s Office. The scheme took money from investors in exchange for shares in the scheme and rewarded its investors for recruiting new participants.
BitClub highlights how widespread investor enthusiasm over bitcoin and other cryptocurrencies can be co-opted by fraudulent actors.
In July, the 35-year-old Romanian programmer behind the operation pleaded guilty to his role in defrauding investors of hundreds of millions of dollars in bitcoin, as CoinDesk previously reported.

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