The Federal Trade Commission has settled with four promoters accused of running fraudulent crypto schemes.
Three of the four, Eric Pinkston, Thomas Dluca, and Louis Gatto were involved in two schemes called the MY7Network and the Bitcoin Funding Team. The schemes promised to makes participants rich according to the FTC. The agency also accused Scott Chandler, the fourth person involved in the scheme, of being involved in a scam to promote Jetcoin and the Bitcoin Funding Team scheme. The latter promised returns of $80,000 a month on an investment of $100. But very few managed to recoup even their initial investment amounts.
As part of the settlements announced, Dluca, Chandler, Pinkston, will pay $453, 932, 31,000, and $29,491 respectively. Pinkston was allowed to pay a reduced amount due to his inability to pay the required amount. However, if the FTC later finds that he misrepresented his ability to pay the fine, he will have to produce the full amount. The four are also permanently banned from participating, operating, or assisting anyone in a multi-level marketing scheme. Additionally, they are barred from misrepresenting the amount of income participants can receive or any other aspect of an investment opportunity.
The FTC first began pursuing the four in February 2018 when a crypto scheme they running began to show signs of collapse. The vote to approve the final order was 5-0, which was filed with the US District Court for the Southern District of Florida.