Much remains murky about BitClub Network, a Bitcoin-themed “program” that in typical HYIP fashion missed at least three advertised launch dates earlier this month.
The launch, however, now appears to have gotten under way shortly after “2 p.m. EST” today, a possible indicator that the “program” is using Panama time.
One promo the PP Blog observed shortly after the launch time was in Indonesian. It appeared to claim that BitClub Network paid between 0.3 percent and 0.8 percent a day. If we are reading this claim correctly, it appears as though the promoter is saying recruits who send in $3,000 will earn somewhere between $9 and $24 a day — or between $270 and $720 a month.
We ran the Indonesian claim through Google Translate. Here is part of what the English translation reads (italics added):
. . . the process is run by experts [mining?] bitcoin Digital Currency you just sit at home and receive a daily income of about 0.3 to 0.8% everyday.
The Indonesian pitch also referred to “compounding.” Many HYIP schemes purport that “earnings” can be compounded and that relatively small sums will be become tremendous fortunes over time. Zeek Rewards, which allegedly collected on the order of $850 million in a combined Ponzi- and pyramid scheme that lasted less than two years, was such a “compounding” program.
If our reading of the early info on BitClub Network is correct, it is an upstart offering fraud with a lower daily payout rate than Zeek, which averaged about 1.5 percent. Promos for Bitclub Network claim recruits will get paid for 1,000 days. Zeek had a much shorter term, absent “rollovers.” BitClub Network also may have a rollover feature.
Alleged Zeek Rewards winner Brian Spatola of Randolph, N.J., appears to be on the front lines of BitClub Network. So does alleged Zeek winner T. LeMont Silver, a named defendant in a clawback action by the court-appointed receiver in the Zeek case.
The BitClubNetwork site itself today was using rolling headlines from other sites. One read, “United Way Becomes Largest Nonprofit to Accept Bitcoin.”
Some scams trade on the names of reputable entities as a means of creating a veneer of legitimacy. The names of other famous companies easily could appear in the rolling headlines on BitClub Network, which is presented as a “mining” venture that offers “shares.”
That famous entities may use Bitcoin does not mean that BitClub Network itself is legitimate. Prior to the emergence of Bitcoin, the scammers who promote HYIPs routinely traded on the names of famous banks and credit-card companies, hoping the legitimacy of those enterprises would rub off on the emerging scams.
Regulators have issued repeated warnings about the volatility of Bitcoin values and about scams that seek to tie themselves to Bitcoin.
Here is part of what BitClub Network says about itself on its website (italics added):
BitClub is not owned by any one person, we are a team of experts, entrepreneurs, professionals, network marketers, and programming geeks who have all come to together to launch a very simple business around a very complex industry. Anyone can join BitClub and begin earning a passive income by taking advantage of our expertise in Bitcoin mining and other Bitcoin related services.
Fuzzy ownership and claims about “passive income” lead to questions about whether a “program” is conducting an offering fraud, selling unregistered securities as investment contracts and permitting recruits who have little or no net worth to direct whatever safety blanket they have to murky enterprises with long reach.
Zeek Rewards preemptively denied it was a “pyramid scheme.” On its website, BitClub Network preemptively denies it is a “ponzi scheme .” The “program” claims to be “based in Europe.”
It further claims to operate “virtually with contributors from all over the world.”
And, it claims, “[o]ur main servers and technology for digital mining is located in a very secure and private location that will only be made available by pictures and a live video feed in the near future.”
An earlier HYIP “program” known as JSS Tripler/JustBeenPaid appeared to use servers in the Netherlands. Frederick Mann, its murky purported operator, once fretted that the JSS/JBP servers could be subjected to a “cruise missile” attack.
This is from the FAQs at the BitClub Network site (italics added):
Q – If BitClub is already successful at mining Bitcoin then why are you sharing profit? Great Question!s [sic]
A: Because of how mining works it is always getting harder and harder for smaller mines to make great profits. This is quickly turning into a game for the big boys. Bigger orders mean bigger discounts on hardware, less electricity and rent per Ghz, more flexibility in what is mined and many other factors. By starting BitClub Network we know that over the next couple of years we could become one of the largest most profitable mines in the world. We will actually make more money sharing the profits with you. That’s why there are so many mining pools, we are just doing things a little differently. We believe in the motto “Making money is a team sport.”
Despite the fact BitClub Network says it does not promote that “a share will have set return and we don’t offer 100% ROI claims,” the site in Indonesian is making a claim that the daily payout will range between 0.3 percent and 0.8 percent. If people send in $3,000 and purportedly make between $9 and $24 a day with it, they’d make between $9,000 and $24,000 in BitClub Network’s purported term of 1,000 days.
Bernard Madoff would not have dared to be so bold.
A graphic of a smiling miner wearing a button-down shirt and swinging a pick appears on the site in Indonesian. Another graphic at the site shows Bitcoin and an Automated Teller Machine — as through BitClubNetwork will be the easiest thing in the world, that laborers worldwide will be smiling.
The site in Indonesian also carries graphics of nice automobiles. A photo displays people standing in front of a “HOLLYWOOD” sign — presumptively in California. The banner in part reads, “MALAYSIA.”
Another “MALAYSIA” banner appears in the foreground of a shot that shows people and pine trees set against a backdrop of snow.
Following a recent pattern in HYIP promos, famous landmarks such as the Eiffel Tower and the Arc de Triomphe also appear on the site in Indonesian.