The man, a 35-year-old Romanian programmer called Silviu Catalin Bacali, was arrested in Germany in December 2019. He was charged with one count of conspiracy to commit wire fraud as well as a conspiracy to offer and sell unregistered securities. He faces a maximum of five years in prison and a fine of $250,000.

Three others — Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks and Joseph Frank Abel — were charged in connection with the scheme in the United States that same month.

Prosecutors allege that the scheme — operational between April 2014 and December 2019 — solicited money from investors in exchange for shares in purported cryptocurrency mining pools. Investors were awarded bonuses for recruiting further investors into the network.

The indictment cites correspondence between Goettsche and Balaci, in which they allegedly discussed how to fake mining earnings and referred to their investors as “sheep.”

While the other defendants allegedly offered investors the choice of investing in three separate Bitcoin (BTC) mining pools, Bacali admitted that he himself was unaware that the BitClub Network operated more than one pool.

Further correspondence between the programmer and Goettsche from 2015 apparently revealed that Bacali was asked to “bump up the daily mining earnings starting today by 60%,” which he objected to as being “not sustainable” and “ponzi teritori.”

He is nonetheless charged with changing figures to mislead investors at his accomplice’s urging. Bacali has also confirmed prosecutors’ allegation that the scheme fleeced at least $722 million worth of BTC from investors.


Source: Accomplice in Alleged $722M Bitcoin Ponzi Scheme Pleads Guilty to Charges