A federal court, at the request of the Federal Trade Commission ("FTC"), halted the activities of four individuals (the "Defendants") accused of operating a cryptocurrency pyramid scheme. The court issued a temporary restraining order and froze the Defendants' assets, pending trial.
In a complaint filed in the U.S. District Court for the Southern District of Florida, the FTC alleged that the Defendants operated and promoted illegal chain-referral schemes for the companies Bitcoin Funding Team, My7Network and Jetcoin. The Defendants allegedly charged participants an initial platform fee, to be paid in bitcoin, with the promise of generating profits by recruiting others and/or paying additional bitcoins. The FTC claimed, however, participants were unlikely to earn returns on their investments.
The FTC alleged that Defendants violated FTC Act Section 5(a) (Unfair Methods of Competition).
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