The scheme was discontinued within two months of its introduction, the FTC noted. The dodgy plans alerted the Commission last year, prompting them to seek a court injunction in March 2018 to end the marketing practices of the MLM plan and freeze the assets of the promoters. A Ponzi system needs a hierarchy or people who are down to generate revenue for people who are up. It’s very similar to a pyramid scheme, except you will not be rewarded for registering others, but you’re earning part of what you pay for.
The plans even promised a return of $ 80,000 per month for just $ 100 of investment. According to FTC, it jumped out of Ponzi’s game book, in large part because most of the participants would not recoup their initial investment. Pyramid systems are often associated with front door retail networks. They are illegal. The simplest is a pyramid scheme of one in which the members of a distribution network get a financial incentive to increase the network, rather than sales. Pyramid schemes are one of them, as are Ponzi schemes and the like.
The organizers said that participants could earn bigger rewards if they paid extra bitcoins. Following a Commission announcement last week, all four promoters have had to pay compensation for their misconduct and are not allowed to participate in any other such program. Organizers are alleged to have violated the prohibition of unfair or fraudulent acts or practices in business dealings under the FTC Act. In addition to the penalty, all four promoters of the programs are permanently prohibited from promoting, attending, or sponsoring marketing programs, pyramid, ponzi, or chain referral programs at multiple levels.
The defendants promoted their program through YouTube videos, publicly available Web sites, blogs and recorded telephone conferences. All defendants are prohibited from making false or misleading claims when selling business or helping others make false claims, the agency said. According to a complaint by the Federal Trade Commission (FTC), participants who have paid a small fee to register Bitcoin or Litecoin should receive high premiums. They claimed that the Bitcoin Funding Team could convert a payment of just over $ 100 into a monthly income of $ 80,000. Via websites, YouTube videos, social media and telephone conferences, they promised big rewards for a small payment from Bitcoin or Litecoin. They often describe the partner package as the partner’s initial investment or startup costs. The defendants have violated the law by mistakenly presenting the chain referral schemes as trustworthy money-making opportunities, falsely claiming that participants could earn a substantial income by participating. ” Said the FTC.
On August 21, 2015, the court stopped the fraudulent practices, confiscated the assets of the defendants, and appointed a temporary recipient for the business until a lawsuit was pending. At the request of the FTC, it issued an interim injunction and frozen the assets of the defendants until they were heard. At the request of the Agency, a federal court issued an injunction and frozen the assets of the defendants. On March 16, 2018, four people behind a crypto-currency pyramid scheme were sharply attacked. At the request of the Federal Trade Commission, it has closed down the activities of four people allegedly promoting fraudulent currency-making with cryptocurrency.