Story By: Sergiu Nazaru, Sub Editor: Joseph Golder, Agency: Central European News
This computer programmer has confessed to an American court to being involved in a Bitcoin Ponzi scheme which took over 720 million USD from its investors.
Romanian programmer Silviu Catalin Balacim 35, was arrested in Germany in December 2019 and has now been tried by the US Attorney’s office for the District of New Jersey over his alleged involvement in the Bitclub Network Ponzi scheme.
According to a statement by American lawyer Craig Carpenito, Bitclub Network demanded money from investors in exchange for participation in the “mining” of cryptocurrencies.
Balaci, from Resita, a city located in western Romania’s Caras-Severin county, is alleged to have changed the figures that appeared on the revenues from mining operations to make it appear that Bitclub Network was actually earning more than in reality.
Investors were reportedly rewarded for recruiting other investors, which led to a Ponzi scheme that ran from 2014 to December 2019.
Balaci reportedly confessed to assisting Matthew Brent Goettsche and Russ Albert Medlin in creating and operating Bitclub Network where he worked as a programmer.
According to justice.gov, the official website of the American justice system, Balaci and Goettsche discussed that the target audience of the Bitclub Network are “stupid” investors, calling them “sheep”. The pair allegedly claimed that they would build the model “on the backs of idiots”.
Balaci claims to have acted on Gottsche’s instructions. In his plea, Balaci confirmed that during the scheme, Bitclub Network took bitcoin worth at least 722 million USD (573 million GBP) from investors.
He now faces up to five years in prison and a $ 250,000 fine (198,388 GBP), or alternatively a return of double the amount owed to the victims.
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