This $722M Bitcoin mining scam referred to its marks as ‘dumb’ investors and ‘sheep’-Computerfanfield

Authorities in the US have arrested three men in connection with BitClub Network, a Bitcoin mining scheme that allegedly defrauded investors out of a staggering $722 million.

According to a release issued by the US Department of Justice , Matthew Brent Goettsche and Jobadiah Sinclair Weeks — both from Colorado — have been charged with conspiracy to commit wire fraud .

They’re also charged, alongside Joseph Frank Abel from California , with offering and selling unregistered securities .

Goettsche reportedly told his conspirators that their target audience would be “dumb” investors . He also allegedly referred to them as “sheep,” and said he was “building this whole model on the backs of idiots.”

In September 2017, he sent an email to another conspirator in which he suggested that BitClub Network “[d]rop mining earnings significantly starting now” so that he could “retire RAF!!! (rich as fuck).”

“The indictment describes the defendants’ use of the complex world of cryptocurrency to take advantage of unsuspecting investors ,” US Attorney Craig Carpenito said.

“What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars . Working with our law enforcement partners here and across the country, we will ensure that these scammers are held to account for their crimes ,” Carpenito added.

Authorities accused the men of deploying elaborate tactics to lure thousands of victims with promises of large returns on their investments in a Bitcoin mining pool.

This allegedly led BitClub to generate hundreds of millions of dollars by recruiting new investors over several years and spent their victims’ money.

The details

Documents shared in court allege that from April 2014 through to December 2019, the defendants operated BitClub Network, a fraudulent scheme that enticed users to invest in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new participants.

Goettsche, Weeks, Abel, and others also conspired to sell BitClub Network shares — which were securities — but failed to register them with the US Securities and Exchange Commission .

Weeks and Abel produced videos and traveled across the world to promote BitClub Network. In one video, a conspirator said BitClub Network was “the most transparent company in the history of the world that I’ve ever seen.” In another video, Abel told investors that BitClub Network was “too big to fail.”

The wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000.

The conspiracy to sell unregistered securities charge carries a maximum penalty of five years in prison and a fine up to $250,000.

Goettsche was arrested in Colorado, Weeks in Florida , and Abel in California . The men are scheduled to have their initial appearances in the districts of their arrests , but it’s worth noting that two defendants are still at large and their identities are under seal.

Coronavirus to hit China’s smartphone and LCD panel production hard

The ongoing coronavirus crisis in China is expected to disrupt local production of LCD panels and smartphones, causing prices to rise and supply shortages across the world.

Leading LCD and OLED panel manufacturers in the country have stated they believe that the total capacity utilization for LCD fabs could be reduced by 10 percent, reports IHS Markit. That number could increase to more than 20 percent during February.

An acute shortage of essential LCD modules in China could emerge, with several third-party module suppliers having already reportedly ceased production.

[READ: How Chinese tech giants are assisting in the battle against coronavirus with AI ]

“Display facilities in Wuhan currently are dealing with the very real impacts of the coronavirus outbreak,” said senior IHS Markit director David Hsieh. “These factories are facing shortages of both labor and key components as a result of mandates designed to limit the contagion’s spread.”

Coronavirus hits China’s smartphone production

China’s major smartphone vendors are also likely to ship five percent fewer smartphones in 2020 than previously anticipated, notes South China Morning Post citing research from Strategy Analytics.

As China produces 70 percent of all smartphones sold, the firm expects global supply and manufacturing to be impacted. Big names such as Huawei, OPPO, Xiaomi, and Vivo are believed to be adversely affected.

All this means that the global market could ship two percent fewer smartphones this year than anticipated. Asus has already reportedly stated that its ROG Phone II is to face temporary shortages due to supply chain disruption caused by the coronavirus epidemic.

Huawei said today that it’s resumed production of consumer devices and carrier equipment, with operations now restored following the Lunar New Year holiday.

Earlier today, CNN reported that the number of coronavirus fatalities in mainland China has overtaken those claimed by the SARS epidemic. The Wuhan strain is responsible for more than 360 deaths in the country, while the SARS outbreak of 2003 caused 349 deaths.

Satoshi Nakaboto: ‘Bitcoin price should be $250K by now, according to John McAfee’s prediction’

Our robot colleague Satoshi Nakaboto writes about Bitcoin every fucking day.

Welcome to another edition of Bitcoin Today, where I, Satoshi Nakaboto, tell you what’s been going on with Bitcoin in the past 24 hours. As Albert Einstein used to say: There’s only one way to go from here!

Bitcoin price

We closed the day, March 25 2020, at a price of $6,681. That’s a minor 0.85 percent decline in 24 hours, or -$57.65. It was the lowest closing price in one day.

We’re still 66 percent below Bitcoin‘s all-time high of $20,089 (December 17 2017).

Bitcoin market cap

Bitcoin’s market cap ended the day at $122,174,009,143. It now commands 67 percent of the total crypto market.

Bitcoin volume

Yesterday’s volume of $44,590,107,888 was the lowest in two days, 117 percent above last year’s average, and 39 percent below last year’s high. That means that yesterday, the Bitcoin network shifted the equivalent of 862 tons of gold.

Bitcoin transactions

A total of 218,084 transactions were conducted yesterday, which is 32 percent below last year’s average and 51 percent below last year’s high.

Bitcoin transaction fee

Yesterday’s average transaction fee concerned $0.84. That’s $2.87 below last year’s high of $3.71.

Bitcoin distribution by address

As of now, there are 10,262 Bitcoin millionaires, or addresses containing more than $1 million worth of Bitcoin.

Furthermore, the top 10 Bitcoin addresses house 5.7 percent of the total supply, the top 100 15.2 percent, and the top 1000 35.2 percent.

Company with a market cap closest to Bitcoin

With a market capitalization of $123 billion, HSBC has a market capitalization most similar to that of Bitcoin at the moment.

Bitcoin’s path towards $1 million

On November 29 2017 notorious Bitcoin evangelist John McAfee predicted that Bitcoin would reach a price of $1 million by the end of 2020.

He even promised to eat his own dick if it doesn’t. Unfortunately for him it’s 97.4 percent behind being on track. Bitcoin‘s price should have been $257,425 by now, according to dickline.info.

Bitcoin Energy Consumption

Bitcoin used an estimated 189 million kilowatt hour of electricity yesterday. On a yearly basis that would amount to 69 terawatt hour. That’s the equivalent of Czech Republic’s energy consumption or 6,4 million US households. Bitcoin’s energy consumption now represents 0.31% of the whole world’s electricity use.

Bitcoin on Twitter

Yesterday 26,878 fresh tweets about Bitcoin were sent out into the world. That’s 44.4 percent above last year’s average. The maximum amount of tweets per day last year about Bitcoin was 75,543.