• The DOJ accuses the founders of IcomTech and Weltsys of presenting a life of luxury to potential investors in order to lure them into investing in their crypto Ponzi scheme.
• Victims invested using cash, checks, wire transfers, and actual cryptocurrency with the promise of guaranteed daily returns on their investment or doubling their investment within six months.
• In reality, neither company was actually trading or mining cryptocurrency which resulted in financial loss to victims while the promoters siphoned off victim funds for personal enrichment.
The U.S. Department of Justice recently took swift action in taking down two massive crypto Ponzi schemes, IcomTech and Forcount, also known as Weltsys. These schemes apparently caused more than $14 million in losses for unsuspecting victims who were enticed by the promise of high returns with no risk. The perpetrators of these alleged scams have been charged with a litany of criminal violations ranging from wire fraud to money laundering. In response to this news, it’s important to be vigilant when investing or trading with cryptocurrency platforms, as they can often lead to exploitation and loss if one isn’t careful. Crypto participants should do thorough research before engaging with any outside service, as these extreme cases involving IcomTech and Forcount demonstrate the need for greater consumer protection when dealing in digital assets.
How the Crypto Ponzi Schemes Operated
The founders of IcomTech and Weltsys lured potential investors with promises of luxurious lifestyles and profits from investing in cryptocurrency trading or mining. However, these companies never actually engaged in any cryptocurrency trading or mining activities. Instead, participants used new investor funds to pay off existing investors, creating the illusion of real profits when none were actually made. Funds were also siphoned off for personal gain by those perpetuating the scheme. In total, $7 million was taken from victims through this crypto Ponzi scheme between May 2017 and December 2019.
Who was Responsible?
Nine individuals have been charged with various counts related to wire fraud, conspiracy to commit money laundering, aggravated identity theft, and other related offenses. Of these nine people, three have already pleaded guilty while six are awaiting trial later this year. Since then, four of the defendants have been released on bail while five remain detained without bond due to their history or likelihood to flee if released on bond.
Victims Speak Out
Victims who lost money through this crypto Ponzi scheme have spoken out about their experiences and hardships since then. Many felt betrayed by former coworkers who had defrauded them out of their hard-earned money — some even lost their life savings as a result of trusting these people with their investments. These stories serve as a cautionary tale for anyone looking to invest in cryptocurrencies going forward — always research what you’re getting yourself into before putting your money on the line!
The recent charges filed by the DOJ against nine individuals for their involvement in an expansive crypto Ponzi scheme illustrate just how important it is to do your research before investing in anything online — especially cryptocurrencies! By understanding how similar schemes work, you can protect yourself from becoming another victim like those affected by IcomTech and Weltsys’ fraudulent activity just a few years ago. While it’s not always possible to avoid being scammed entirely if you keep informed about current events and trends within digital finance you can help reduce your risk significantly.