This alleged Bitcoin scam looked a lot like a pyramid scheme. Five men face federal charges of bilking investors of $722 million.

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The scheme appears to have started as a relatively modest scam and spiraled dramatically in ambition. Internal messages between the conspirators give the impression of growing glee at the ease of taking advantage of investors, referring to **“building this whole model on the backs of idiots.”** The men allegedly described their victims as “**dumb**” investors and “**sheep**.” *“They were not wrong,” Emin Gun Sirer, the CEO of blockchain startup Ava Labs, quipped on Twitter.*

kanemano

Remember: when you do your criming, be sure to write all the details of your criming down in emails and text records for future historians.

NelsonMinar

Wasawasawasawasawasuuuuuuuup bitconneeeeeeeeeeect

secondaccforporn18

This wasn’t a bitcoin scam. It was a mining scam. If you take money from people, saying you’re investing it in gold mining equipment and gold mining activities, but you instead spend it on buying gold or personal assets, they would call that a mining scam. Bitcoin wasn’t the offering. The opportunity to invest in expensive bitcoin mining rigs was the offering. Bitcoin mining is expensive because “mining” means using enormous amounts of computing power (and electricity) to generate the next bitcoin (which involves very complex algorithms and a peer network that your average PC can’t do on its own). Some people legitimately pool their money or computing power to participate in mining. In this case that’s what was being offered, but the people running the pool were just taking the money and not using it to mine bitcoin.

DragonsOfEden

Cryptocurrency is a ponzi where everyone involved already knows it’s a ponzi. Change my mind.

i_eight