Bitcoin Funding Team

A hundred dollars into eighty thousand a month

Thomas Dluca, Louis Gatto and Eric Pinkston promoted chain referral schemes called Bitcoin Funding Team and My7Network through websites, YouTube videos, social media and conference calls.

The headline claim was that a payment worth just over $100 could produce $80,000 in monthly income.

Why it could not work

Participants could only generate revenue by recruiting new participants and getting them to pay cryptocurrency too. A Bitcoin Funding Team participant had to make an initial bitcoin payment to an earlier participant, plus a fee to Bitcoin Funding Team, which then made them eligible to recruit and collect from people below them. Paying more bitcoin was said to unlock bigger rewards.

The FTC alleged the structure ensured few would benefit and the majority would fail to recoup their initial payment. As the Bureau’s Acting Director put it, the schemes “were designed to enrich those at the top at the expense of everyone else.”

A fourth promoter, Scott Chandler, marketed Bitcoin Funding Team and a separate scheme called Jetcoin, which promised a fixed rate of return from bitcoin trading and claimed participants could double their investment in 50 days. Jetcoin ceased operating within two months of launching.

The settlements

A federal court halted the schemes and froze assets in March 2018. Under the 2019 settlements, Dluca pays $453,932 and Chandler pays $31,000. Pinkston accepted a $461,035 judgment suspended on payment of $29,491 for inability to pay.

All four, including Gatto, are permanently barred from operating or participating in any multi-level marketing, pyramid, Ponzi or chain referral scheme, and from misrepresenting the income available from any business venture or investment opportunity.

In November 2020 the FTC sent 7,964 PayPal refunds totaling more than $470,000, averaging about $59.

What is not established

Stipulated final orders resolve allegations without any admission or finding of wrongdoing.