Jack Abramoff has agreed to plead guilty to charges of conducting a $ 5.6 million Bitcoin scam .
The dishonored lobbyist tricked investors into buying tokens that he believed could be converted to a new, improved version of Bitcoin .
Mr. Abramoff now faces up to five years in prison.
Jack Abramoff, a disgraced lobbyist in the administration of former President George W. Bush, has admitted to his role in managing a $ 5.6 million Bitcoin scam .
The US Attorney’s Office in San Francisco confirmed in a statement Thursday that Abramaoff had committed fraud. He did this by getting small investors to buy digital tokens from his cryptocurrency project, AMB Bitcoin . He promised people that the tokens would be convertible to a cryptocurrency that would be more secure than Bitcoin .
BITCOIN TECHNOLOGY THAT DIDN'T EXIST
Mr. Abramaoff sold illegal tokens through a Nevada-based company called NAC Foundation. Authorities previously charged the company's CEO, Rowland Marcus Andrade, for his involvement in wire fraud and money laundering.
Meanwhile, Mr. Abramaoff and Andrade have also lied about the deployment of their so-called technology Bitcoin in government offices, saying it would help in the fight against money laundering and terrorist financing. They have also purchased a lucrative coverage to attract investors in the scam.
An open complaint from one of the AMB Bitcoin investors . Source: Better Business Bureau
The plan then fell on the radar of the Securities and Exchange Commission (SEC). The U.S. regulator released a framework in April 2019 to help cryptocurrency firms determine whether or not their token is security. The agency also accused the NAC Foundation of ignoring its directives.
"We allege that these defendants have induced investors astray several times by funding a non-existent technology, falsely claiming that this technology would make them more secure digital asset transactions," said Kristina Littman, chief of the division of the cyber DRY.
Regulators and prosecutors have put a chain of Bitcoin companies on their radar since 2017 for selling unregistered securities to investors during the infamous ICO craze in late 2017. The craze has helped Bitcoin , the world's largest cryptocurrency in the world, reaching $ 20,000, its record on that date.
Shady startups have raised hundreds of millions by selling worthless cryptocurrency tokens that are traded primarily on unregulated offshore exchanges. Over 87% of these young companies don ' have failed to produce a real product, resulting in a cumulative loss of more than 10 billion.
PRISON TIME
Mr. Abramoff's role in AMB Bitcoin also emerged during the peak of the ICO craze. The media have reported that the Washington lobbyist produced a program called "Capitol Makeover: Bitcoin Brigade." He promised that marketing would help him lobby Bitcoin in the United States Congress.
However, the show never aired, but helped create hype for AMB Bitcoin . This has pushed many American investors into the trap. Meanwhile, the attackers went into the purchase of Mr. Abramoff's personal needs, including two expensive cards and properties in Texas.
Mr. Abramoff faces up to five years in prison for his crimes.
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