Dear Clients,
While we await news regarding this case we continue to publish parts of the indictment. It illustrates how irresponsible individuals abuse people’s trust and carefully devise fraudulent projects. This results in even highly educated individuals in the field of Crypto becoming victims of cunning fraudsters.
Quoting parts of the indictment:
d. HON represented to investors that HON would pool investor money together to sustain, among other things, bitcoin mining pools, including by purchasing mining equipment and computer power and by engaging in cryptocurrency mining. On its website, BON further stated that HON “use our leverage and massive purchasing power to strategically buy mining hardware at the lowest prices and share in all the profits produced.”
e. HON represented to investors that investors’ mining returns would be calculated based on the mining success of the collective operations for each of the pools. HON represented that purchases of shares in the mining pools would determine a BCN member’s allocation of mining pool profits, with more shares leading to a greater allocation of the mining pool profits. BCN’s website displayed the following illustration of how BCN investors would earn profit from their investments in shares of the purported bitcoin mining pools:
Example: Using Mine #1, if the total Bitcoin mined for the day = 1 ETC and there are 100 shares outstanding then each share would earn .01 ETC. From this total 50% of it would be paid directly to member as profit (.005 Bit) and the other 50% (.005 BTC) would be used to fund the mining operation costs and to purchase additional shares.
So if the value of 1 Bitcoin = $500 USD and you have 1 share then you would earn $5 USD (.01 Bit) of which $2.50 is paid to you and $2.50 is used to purchase an additional share on your behalf. In this case you would purchase an additional .005 shares with your $2.50 and you would have a total of 1.005 shares going into the next day that you are now earning on.
BCN represented that its “team” would control, manage, and operate the Bitcoin mining, while investors would share in the pro-rata distribution of profits derived from the Bitcoin mining pools. On its website, BCN claimed that it was not owned by any one person, but instead was a team of experts, entrepreneurs, professionals, network markers, and programming geeks who have all come together to launch a very simple business around a very complex industry. Anyone can join BitClub and begin earning a passive income by taking advantage of our expertise in Bitcoin mining and other related services…
Zoran Miljakovic
Attorney at Law