FTC shuts down the ‘Bitcoin Funding Team’ for promoting deceptive money-making scheme

The Federal Trade Commission shut down multiple online “money-making schemes” involving cryptocurrency Friday.

A federal court in Florida, at request of the FTC, halted activities and froze the assets of four men for allegedly promoting “deceptive” chain referral networks.

Three of the defendants, Thomas Dluca, Louis Gatto and Eric Pinkston were accused of using YouTube, social media and other websites to convince people they could take $100 and turn it into $80,000 in monthly income through the “Bitcoin Funding Team” and “My7Network”, the FTC said.

“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’s Bureau of Consumer Protection said in a statement. “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.”

Participants were asked to pay in cryptocurrencies like Bitcoin and litecoin, and could only make a profit by recruiting new people, the FTC complaint said. Most however allegedly failed to recover the initial investment, according to the agency.

A fourth defendant, Scott Chandler, also allegedly promoted the “Bitcoin Funding Team” and a similar network “Jetcoin,” the FTC said.

Jetcoin participants were promised they could double their investment in 50 days, according to the FTC complaint. Meanwhile the scheme “failed to deliver on these claims and ceased operation within two months of launching,” according to the FTC.

The news follows cryptocurrency advertising bans by Google, the world’s largest online ad provider, this week. The tech giant announced an update to its financial services policy Wednesday that will restrict advertising for “cryptocurrencies and related content” starting in June.

Facebook, the world’s second largest online ad provider, took similar action in January. The social network announced it would ban all ads that promote cryptocurrencies, to provent the spread of what the company called “financial products and services frequently associated with misleading or deceptive promotional practices.”

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