Nine People Charged for Allegedly Operating Two Crypto Ponzi Schemes

Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts

Fresh from charging Sam Bankman-Fried, the Southern District of New York has now set its sights on prosecuting nine people who were allegedly involved in operating two crypto Ponzi schemes.

The projects in question were known as IcomTech and Forcount — and later as Weltsys.

They claimed to be mining and trading companies, and allegedly deceived victims by promising daily returns — and guaranteeing that any investment would double in six months.

But it's claimed that neither company actually engaged in this activity, and funds were used to pay other victims, further promote the schemes, and enrich the founders.

Prosecutors claim lavish events were held to entice new customers, adding:

"The schemes' promoters often showed up at larger-scale events in expensive cars and wearing luxury clothing as a way of exhibiting their purportedly legitimate success from the schemes. The atmosphere of these events was festive and designed to generate excitement about the schemes."

Those who signed up were given access to an online portal where they could apparently see how much profit they had made — but most victims were unable to make any withdrawals and ended up losing everything.

The charges against the nine people include conspiracy to commit wire fraud, conspiracy to commit money laundering, and making false statements.

U.S. Attorney Damian Williams warned:

"With these two indictments, this office is sending a message to all cryptocurrency scammers: We are coming for you. Stealing is stealing, even when dressed up in the jargon of cryptocurrency."

And the Department of Homeland Security's special agent in charge, Ivan Arvelo, added:

"The excitement around cryptocurrency and the potential to make huge profits attracted would-be investors to the alleged schemes run by the individuals indicted today. With high-end clothes and cars, these individuals are alleged to have presented a life of luxury to potential investors, but instead of a lucrative investment opportunity, the victims were fleeced of their savings and left with nothing to show for it."