According to an official SEC ruling in the Republic of the Philippines, the mining project Mining City was recognized by the Ponzi scheme and closed pending a court decision. According to the SEC, the company was organized by a group of people headed by Georgy Rogovsky. Other participants in the criminal scheme also appear in the case, namely Anthony Aguilar, the head of the representative office in the Philippines and John Ray Gray, the administrator of the Facebook group, who were involved in raising funds from investors.
Mining City offered its clients to invest in the purchase of mining facilities for mining Bitcoin Value (BTCV) cryptocurrency. At the same time, investors could choose their own investment plan and profit from the coins allegedly mined and sold.
The investment amount could vary from $300 to $12600. The payment included: a limited number of days for mining, a percentage of the hash rate, as well as various bonuses. Thus, the project managed to attract dozens of miners who invested in the project. In fact, it turned out that the Mining City project is nothing more than just a Ponzi scheme.
In other words, only the organizers, the first investors and recruiters who invited new clients to invest in the project, received profit from this scheme. At the same time, a very powerful advertising campaign was carried out. As stated in the official statement of the department, the scammers used advertising on social networks, on YouTube video hosting, as well as other Internet sources.
At the moment, the activities of Mining City have been stopped, and the organizers and participants are awaiting a court decision. Under the laws of the Republic of the Philippines, violators of the Securities Act can be fined 5 million pesos and sentenced to imprisonment for up to 21 years. In addition, all Mining City members will be entered into a special register of persons who can no longer open a business in cryptocurrencies or the financial sector. All money received from investors must be returned to the owners.
Cryptocurrency scams are not uncommon
Cryptocurrency scams are not uncommon. Taking advantage of the fact that the cryptocurrency market does not have a clear enough regulation, criminals are looking for loopholes to carry out fraudulent transactions with coins. One of the most striking examples of the Ponzi scheme is the PlusToken project. In just a year, the scammers managed to raise more than $3 billion and then disappear with the money.
Earlier, BeInCrypto reported that at least 7 projects that were popular among a huge number of investors turned out to be a scam. Among them, in addition to the notorious PlusToken, are Prizm, BTC Trade, OneCoin and others.
And the famous Bitcoin critic Nouriel Roubini considers the entire crypto market to be one big scam. Ponzi schemes are the highest form of fraud that Bitcoin is capable of, and cases like PlusToken are proof of this, Roubini said. Roubini has long been one of the most ardent opponents of the cryptocurrency industry. However, not everyone approves of his position, reproaching the Nobel laureate in economics for one-sided views.