After my previous article "Satoshi Pyramid is a SCAM" I was expected retaliative and diminishing comments from those involved with Satoshi Pyramid.
It was the same with the Bitconnect shills back in 2017. Many of us tried to put sense to every naive investor that had no idea this scam was stealing their money.
I saved many by educating them online and even a colleague of mine who still thanks me as he was about to put his life savings into this scam.
Those of you that weren't active during the Bitconnect days don't understand how much persuasive the promotional activities of this Ponzi were.
And the same is with every Ponzi or Pyramid, some succeed and reach to billions before collapsing, while other don't and collapse very early. It depends on a few factors, like backing, finding the right advocates with solid scamming backgrounds, and having no remorse or feelings.
Not a single one of them cared for the suffering they brought. Anyone that participates in Ponzi's is brainwashed by the arguments of the promoters.
In this post, I will provide details on the top Crypto Ponzi schemes that have taken money out of the industry and withdrawn to fiat bank accounts of scammers. The Ponzi and Pyramid Schemes that infest the Crypto World have direct implications to our investments as we are talking about billions of dollars that are not kept in the market but liquidated in fiat.
ONECOIN ~4 Billion
A 4 billion dollar Ponzi scheme founded by Ruja Ignatova and still has operation cells running, no matter the exposure and the international arrest warrants against her.
Founded in 2014 the OneCoin Ponzi expanded rapidly and inside three years it grown to $4 billion of operating profits for the leaders of the Ponzi. The concept of the OneCoin scheme can be found on Wikipedia and I recommend reading about this more if you want to educate yourself on these dangers that plague the Crypto field.
With conventions and huge promotion by low-level advocates, it spread operational cells throughout the world. From China to the UK and Latin America, families were lured into the scheme and had their life savings lost.
Four billion dollars of investors' funds were lost and pocketed by the OneCoin gang. Since 2017 lawsuits, international warrants and arrests took place.
Ruja Ignatova (founder) is on the run from the FBI since October 2017 after the charges against her by US authorities. Her whereabouts currently remain unknown. A lawsuit alleges that Ruja when disappeared was in possession of 230,000 BTC (Source1).
Konstantin Ignatov (brother of Ruja) pleaded guilty in 2019 to fraud and money laundering connected with OneCoin. Currently awaiting sentence of a total maximum of 90 years in prison. (Source1, Source2)
Mark Scott, a lawyer representing OneCoin in the US was found guilty of laundering the procedures of the OneCoin scheme and sentenced to 50 years in prison. Moreover, the DOJ seeks to forfeit ~$400 million from his bank accounts. (Source1, Source2). For more recent information on his whereabouts visit BehindMLM.
Many more OneCoin scammers (Sebastian Greenwood, David Pike, Gilbert Armenta, and more) found guilty and either serving time or waiting sentence. BehindMLM often posts news about them. You can find the top names and more information on their whereabouts on this link.
For the time being only Ruja Ignatova is still on the run and avoiding arrest.
BITCONNECT: $3-12 Billion (number varies according to reports)
The most popular scam in the Crypto World. The King of Crypto Scams.
Source: BehindMLM
Typical Ponzi that offered 1% compound daily interest on its platform. It scammed everyone and paid almost nobody at all.
It collapsed right a second "cease and desist" letter from US financial authorities. (more info: Source1, Source2)
Source: Texas.gov
You can find information on Bitconnect everywhere online as for the rest Ponzi schemes. Not going to bother a lot with the plan and structure, Bitconnect was a scam just like Satoshi Pyramid with minor differences.
The massive online promotion by numerous accounts on Google and social media made this scam reach this kind of publicity . It was a Ponzi with big plans, and lots of shill accounts were actively promoting it everywhere.
Source: Finance Magnates
Divyesh Darji (Head of Bitconnect) was arrested in 2019. Currently on the run after released on bail and failed to report at the local police station. (Source1, Source2)
Dhaval Mavani (Bitconnect website developer and promoter) Arrested in 2019 after extradited from Abu Dhabi. (Source1, Source2)
Satish Kumbhani and Suresh Gorasiya were also very close associates of Divyesh Darji. Kumbhani was arrested in 2019 too after first being questioned by the FBI. (Source).
An interesting case is the one of Shailesh Bhatt. Bhatt invested in Bitconnect and when the scheme collapsed he abducted employees of Satish Kumbhani and extorted them to pay him 2,400 BTC. Bhatt was arrested in Dehli, in 2020. (Source1)
Reports from India are not very clear on the sentences of those accused, but it is clear that most of the heads of the Bitconnect operations have been recognized, arrested and some are still on the run.
Meanwhile, the Indian authorities are looking to seize the assets of the Bitconnect leaders (Source1).
These were all high-profile criminals running scams before they launched Bitconnect. News and reports for the Bitconnect ring leaders are limited this year from India and probably Divyesh Darji is still escaping arrest.
John Bigatton was very high in the hierarchy of Bitconnect. An Australian entrepreneur, named by Australian authorities as the "Australian Director" of the collapsed Ponzi. (Source1)
Source: Dailymail (UK)
At the height of his success with BitConnect, Mr Bigatton had danced on stage at a convention in Asia as cash rained down from the roof.
His wife, Madeline Bigatton, mother of two, suddenly disappeared on March 25, 2018, and has not been found since then. (Source1)
Police searched the area where Mrs Bigatton’s car was found, but failed to find any trace of the missing mum.
‘When they got up there they found the car empty, with her wedding rings inside. We assume she jumped off, but they searched for her body and never found it,’ he said.
-Source: Expressdigest
John Bigatton is accused of being the head of operations of Bitconnect in Australia and currently awaits sentence. He will face a long jail time and be asked to pay back for repercussions of hundreds of millions of USD.
And if you like mystery, there is also this story on Reddit that connects some dots.
The US Bitconnect Promoters
The infamous Bitconnect gang is finally brought to justice.
According to the SEC, BitConnect used a network of promoters, including to market and sell securities in its “lending program.”
The SEC announced legal action against the following Bitconnect promoters and also claims the amount they've obtained from their promotion of Bitconnect:
Trevon Brown (Trevon James): at least $480,000
Craig Grant, over $1,300,000
Ryan Maasen, over $475,000
Michael Noble (Michael Crypto): over $730,000
Joshua Jeppesen is also charged as the liaison between promoters and the Bitconnect leaders and a Bitconnect representative in Bitconnect events and conferences, having obtained more than $2,300,000 from his Bitconnect activities. (Source)
Two of the most famous Bitconnect promoters are Crypto Nick and Carlos Matos. Crypto Nick completely deleted all YouTube videos the moment the Ponzi collapsed and disappeared. There is no mention of his whereabouts anywhere and no mention of these two on the indictment either. However, I doubt he will get away as he was one of the top promoters. We will be here and follow the news.
Plus Token: $ (~$3 Billion in 2019 cryptocurrency prices)
The total amount of $3 billion is based on the price of cryptocurrencies like BTC, XRP, ETH, EOS, and more coins these scammers managed to obtain at the peak of their activities in July 2019.
This was a Ponzi Scheme running mostly in Asia (China, S. Korea, and Vietnam). All the promoters and top-level management of the Plus Token Ponzi were arrested by Chinese authorities and currently are serving jail time up to 11 years, after having cooperated completely with authorities.
The Chinese authorities seized all the unlaundered cryptocurrencies as the criminals handed the wallet keys to manage a better sentence.
In July 2020, China's Ministry of Public Security announced that 27 "major criminal suspects" and 82 "key" members of PlusToken have been arrested.
Bonus: Bernie Madoff: $65 Billion Ponzi Scheme
Bernie Maddoff was running a Ponzi inside Wall Street for decades. Financial analysts had evidence since 1999 and alerted the SEC and other US Authorities several times throughout a decade but they were always turned down.
The Madoff Ponzi scheme was giving standard returns no matter the price corrections and market downturns or uptrends.
His Chase account had over $5.5 billion in mid-2008, but by late November was down to $234 million, a fraction of the outstanding redemptions.
No new money was entering the Maddoff "investment fund" in 2008 as there was a liquidity crisis and the beginning of a recession. He was arrested in December 2008 and pleaded guilty to all charges in 2009. He was sentenced to 150 years imprisonment.
A Sad Ending to the Maddoff's Dynasty
Madoff was charged with defrauding investors for $65 Billion (Source). These were the promised returns over the years of the $20 Billion in total that was invested in the Madoff fund. It is estimated that the US financial authorities have recovered 17.5 Billion from the money so far (Source).
Bernie Madoff died in April 2021 in a prison medical facility.
His elder son Marc Madoff committed suicide in 2010, two years after his father's arrest while being a subject of another lawsuit. (Source)
His other son Andrew also died in 2014 of lymphoma.
Madoff's financial executive, Frank DiPascali, died during the trial, he was to face 125 years sentence.
Things didn't work out for the Madoff family, it is a sad ending and if anyone wants to read more about it, I suggest reading this article (link) by Kaitlin Menza, it provides a great look inside to what happened.
Maybe when someone reads about a Pyramid scheme will think that it could be a very lucrative business in case he/she runs one.
The money is always moving to the creator of the Pyramid no matter what, while everyone else is not guaranteed any return. In fact, all these schemes eventually collapse since there is always a limited number of participants (suckers).
The top-level and the top promoters will earn the most, then the scheme will collapse, leaving families in ruins and dreams crashed.
Another story you should read is the one of Charles Ponzi. In case you are thinking this guy made it big, again you are wrong. He died in poverty and alone, with a similar ending to Bernie Madoff.
All of the founders and promoters of this kind of schemes are found and arrested. Some may escape captivity for the time being but I wonder how can a fugitive's life be. Is this justice served, is it deserved, when reading about all these tragedies and what can someone be thinking today when promoting a Ponzi.
Giving hope to someone in need and grabbing his last $30 is a game for some today. Is such apathy towards other human beings going to help you, or perhaps you understand now why these schemes are illegal all over the world and in the end, you will get caught and pay an equal price?
Lead Image taken from: Wikipedia
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Thanks for this eye opener, I was just introduced to cryptocurrency in May by happyboy and since then have trying to invest in satoshi, your article was really an eye opener to me