Thursday, December 12, 2019

Coloradans Matthew Goettsche And Jobadiah Weeks Arrested In $722 Million Cryptocurrency Scheme

Ed.'s note: Once the criminals and thieves running cryptocurrencies have built the cryptocurrencies and infrastructure, the banks and the state will then step in to regulate the cryptocurrency market. These criminals because of their insatiable greed ended up accomplishing what the central banks will end up doing anyway and that is building cryptocurrencies at which point there will be total regulation and then the introduction of a central bank cryptocurrency. When the present central banking model collapses and probably intentionally, it will be at that point when highly regulated cryptocurrencies are likely introduced for broad use. Right now the incredibly complex cryptocurrency market is a "lawless western town."

Source: CBS News

December 11, 2019 | By Matthew Goettsche

(AP) — Two Colorado men are accused of fraud in a three-person cryptocurrency mining operation that officials labeled a "high-tech Ponzi scheme" that bilked investors out of $722 million, federal officials announced Tuesday.

Matthew Goettsche, 37, from Lafayette, was arrested Tuesday in Colorado, while Jobadiah Weeks, 38, from Arvada, was taken into custody in Florida and Joseph Abel, 49, was arrested in California, according to the U.S. attorney's office.

It wasn't immediately clear whether they had attorneys who could speak for them.

According to federal prosecutors, the men ran a business called BitClub Network from April 2014 through this month that promised earnings to investors who bought shares in its supposed cyrptocurrency mining pool.

Mining involves using computers to solve mathematical problems in order to record virtual currency transactions. Miners receive cryptocurrency for their work.

But the earnings reported by the network were false, authorities contend.

The operation also rewarded investors for recruiting new investors, according to prosecutors.

"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,'" a statement from the U.S. attorney's office said.

In 2015, Goettsche told another conspirator to increase the daily earnings by 60% and was told it was unsustainable and "Ponzi territory," the office said. A Ponzi scheme involves paying early investors with money obtained from later investors rather than from actual profits.

Goettsche and the others obtained the equivalent of at least $722 million from investors around the world and spent it on lavish lifestyles, authorities alleged.

They also conspired to sell shares that weren't registered with the U.S. Securities and Exchange Commission, according to prosecutors.

"The indictment describes the defendants' use of the complex world of cryptocurrency to take advantage of unsuspecting investors," U.S. Attorney Craig Carpenito said in a statement. "What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars."

Please go to CBS News to read the entire article.


Source Fort Russ

China Will Soon Test Its Own Cryptocurrency For Financial Sovereignty

By Paul Antonopoulos | Dec 11, 2019

BEIJING – The People's Bank of China has stepped up efforts to launch its own cryptocurrency with the goal of gaining leadership before other central banks in the world.

In addition, the Asian giant intends to maintain its financial sovereignty and is planning to conduct a series of tests with the system called Digital Currency Electronic Payment (DCEP) in some cities of the country, reports The Global Times.

The tests will be attended by some of the largest banks in the country and telecom operators, and should be expanded next year. In addition to banks, e-commerce giants such as Alibaba and Tencent will also participate in the tests.

Next year, there will likely be greater competition between digital currencies not just from central banks, but also between multinationals like Facebook and major international financial institutions, according to Cao Yin, deputy director of the Blockchain Advanced Research Institute.

According to the expert, the People's Bank of China accelerated its digital currency project after Facebook announced its plans to launch its digital currency, the Libra, which is supported by approximately 2.7 million users, and has independence from all. financial institutions, which could trigger a threat to the flow of financial capital.

"China needs to have equivalent 'monetary instruments' to consolidate its financial sovereignty," said Cao.

Earlier, a senior Chinese central bank official said the digital currency will bear some resemblance to Facebook’s cryptocurrency. China’s digital currency should help protect the country's sovereignty, be as secure as central bank notes and can be used even when offline, and counter money laundering.

Meanwhile, Facebook's digital currency, called the Pound, is important for extending US financial leadership, says Mark Zuckerberg.

The Facebook CEO's analysis is in a speech he will make in a US House committee and was obtained by the AFP news agency.

The Facebook founder's speech comes amid intense scrutiny from regulators and legislators around the world who express skepticism about the impact of the cryptocurrency proposal.

Zuckerberg acknowledges that Facebook's privacy and data protection errors have led many to conclude that they are not the ideal messenger at the moment" for digital currency, but argues that the plan would be beneficial to many people, including those outside the system.

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