Russ Medlin, known for creating the Bitclub Network Bitcoin mining system, was arrested in Jakarta, Indonesia.
This was revealed by Reuters. But according to the international news agency, in reality the scam involving Bitcoin has nothing to do with him this time. In fact, he is being accused of committing sexual crimes with minors.
Russ Albert Medlin was arrested in his residence by the local police who interrogated three minors before taking action.
The Juvenile Protection Act foresees 15 years in prison for this type of crime. However, Russ Medlin was also wanted by the US FBI, so extradition is not excluded.
Bitclub Network, a $720 million scam.
The US authorities have branded the BitClub Network case as a Ponzi scheme. Last December in New Jersey, three people were arrested and imprisoned in New Jersey on charges of fraud and selling unregistered securities. At the time, however, two people were on the run, and one was Russ Medlin himself.
According to the reconstruction of the US prosecutor’s office, the people arrested were persuading, through the Bitclub Network, unsuspecting people to invest money in the Bitcoin mining pool with the promise of cryptocurrency profits. In addition, the investors themselves earned if they recruited new victims, following a multi-level marketing style scheme.
All while the scammers spent the money they received from unsuspecting victims all over the world.
The press release issued at the time says that:
“Goettsche discussed with his conspirators that their target audience would be “dumb” investors, referred to them as “sheep,” and said he was ‘building this whole model on the backs of idiots’”.
This business “model” went on from 2014 to 2019 in the United States, when it was closed.
During that time promoters were selling shares of Bitclub Network without buying the mining pools needed to mine Bitcoin. With this scheme, they would have raised 722 million dollars from those who believed in them.
Moreover, the same shares were not registered with the Securities and Exchange Commission of the United States.
But apparently, the promoters were able to market themselves well, to the extent that in various videos cited by the Prosecutor’s Office they said that Bitclub Network was “the most transparent company in the history of the world” or even that Bitclub Network was “too big to fail”.
For these crimes, they risk up to 20 years in jail and a $250,000 fine.
The case of BitClub Network seems to match that of OneCoin. Another Ponzi scheme, one of the most famous cryptocurrency-themed scams, so much so that it has also been called “the scam of the century”.
Even in this case, the creator, Ruja Ignatova, is a fugitive, while her brother Konstantin has been arrested in the United States. According to investigators, the promotion of this phantom cryptocurrency and an MLM-type structure would have raised billions of dollars. All at the expense of unsuspecting investors.
It is worth repeating a piece of advice: in the cryptocurrency world, one must always stay away from those who promise easy profits with minimal investments.