TheBlock
The U.S. Department of Justice plans to drop charges against Matthew Goettsche, the alleged ringleader of the BitClub Network Ponzi scheme, according to a Bloomberg report. Goettsche was indicted in 2019 alongside co-defendants in a scheme prosecutors said pulled in $722 million from investors by selling shares in fictitious crypto-mining pools and paying earlier participants with money from newer ones.
While Goettsche's case has dragged on for years, three of his co-defendants have already pleaded guilty. Among those reportedly urging the DOJ to drop the charges are a former contestant on "The Apprentice" and a criminal-justice advocate who has helped clients secure pardons from President Trump.
Why it matters
BitClub was one of the highest-profile crypto Ponzi prosecutions of the last cycle, alongside OneCoin, Plaid Inc., and the early-stage cases that prosecutors used to establish that legacy wire-fraud and securities statutes reach token-pitch operations. A formal dismissal of the lead count against the alleged ringleader, after three co-defendants have pleaded, is the kind of late-stage reversal defense attorneys point to when negotiating the remaining crypto-fraud dockets still pending on federal court calendars.
Frequently asked questions
-
What was the BitClub Network?
BitClub Network was a crypto-mining pool scheme prosecutors said raised $722 million from investors by selling shares in supposed mining operations and paying older participants with money from newer ones, a textbook Ponzi structure.
-
When was Matthew Goettsche indicted?
Goettsche was indicted in 2019 alongside co-defendants in a scheme prosecutors said pulled $722 million from investors through fictitious crypto-mining pools.
-
What happened to the other BitClub defendants?
Three co-defendants in the BitClub case pleaded guilty while Goettsche's case dragged on for years before the DOJ moved to drop the charges against him.
-
Why are the charges being dropped?
Per Bloomberg, the DOJ is planning to drop the charges. The report notes that two people urging that outcome include a former contestant on "The Apprentice" and a criminal-justice advocate who has helped clients secure pardons from President Trump.
-
Why does this case matter for crypto fraud prosecutions?
BitClub was one of the highest-profile crypto-Ponzi prosecutions of the last cycle, alongside OneCoin and Plaid Inc., and was used to establish that legacy wire-fraud and securities statutes reach token-pitch operations.
CryptoSlate
Crypto News
WuBlockchain
CoinDesk
Lookonchain
WatcherGuru
CoinTelegraph