Crypto Ponzi Scheme Airbit finally faces justice

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  • In 2015, as the crypto industry gained recognition, Rodriguez, and Dos Santos founded Airbit Club in pretence of offering crypto trading services.
  • The justice system eventually convicted and sentenced Rodriguez to 12 years in prison.
  • The founders of Airbit Club were involved in numerous Ponzi scams, including the pyramid investment scheme, Vizinova.

The crypto industry is considered one of the most successful industries in modern times. Aside from being a trillion-dollar industry, its technology has proven helpful in redefining several industries. Its success would later be the foundation of newer projects like the NFT marketplace, the fintech industry, and its greatest achievement of digital ownership.

Unfortunately, its success has attracted a plethora of hackers, scammers, and money launderers. For instance, the FTX crash is the greatest scam in the history of technology, causing billions in losses.

This tragedy is among many incidents occurring since the industry’s founding. In recent news, the long arm of justice has finally dealt its blow to the crypto Ponzi scheme Airbit Club. Its last defendant, Dos Santos, is the last remnant of a crypto scam plaguing the industry since 2016.

Airbit Club crypto Ponzi scheme

Crypto scams have evolved yearly from small-scale rug pulls to billion-dollar losses. In five years, it became brutally clear that even top-rated crypto exchanges can pull a fast one on entire industries. OneCoin was among the very first to prove this fear, and as the years passed, hackers and scammers became the very individuals offering crypto services on a global scale.

In 2015, as the crypto industry gained recognition, Rodriguez, and Dos Santos founded Airbit Club in pretence of offering crypto trading services. The corporation aggressively marketed its features, luring in unsuspecting investors. Soon, what was a small organization became a multilevel marketing club operating within the industry.

The duo, alongside their team, were professional scammers who enticed investors with extravagant expos and presentations. In addition, they offered additional perks for first-time investors, including access to an online portal showing false investment returns. Unfortunately, Bitcoin’s growing prices and the rise of exchanges blinded millions of naive crypto traders towards their crypto Ponzi scheme. 

The Fall of Airbit

In 2016, warning patterns were as clear as day, with victims unable to withdraw funds. Airbit Club would merely reassure their investors, stating their smart contract had issues or their system experienced system updates.

In reality, the duo spent the defrauded money on luxury items and expos that would later expand the Airbit club’s reach. According to the DOJ, Scott Hughes, Rodriguez’s attorney, played a vital role in masking Airbit’s true nature. The attorney used his account to conceal the illicit proceeding of Airbit Club, banding it under the attorney’s account. 

Also, Read Crypto investment mistakes affecting the African crypto ecosystem.

Furthermore, before indulging in a crypto scam, the duo was involved in numerous Ponzi scams, including the pyramid investment scheme, Vizinova. The US SEC had several grievances and legal battles with Dos Santos and Rodriguez. Unfortunately, the long proceedings of the legal departments only slowed down their attempts to further scam unknowing clients. Hughes was also involved in a legal battle with the US SEC.

He would later assist them with the organization by removing the negative information about both schemes from the internet. Fortunately, their greed would be their undoing, as the crypto Ponzi scheme would drastically lose its clients after years of pending payments.

What is left of the Crypto Ponzi scheme Airbit Club

In recent developments, Dos Santos remains the last remnant of the crypto Ponzi scheme Airbit Club. The justice system eventually convicted and sentenced Rodriguez to 12 years in prison. Furthermore, District Court Judge George B. Daniels ordered him to pay a forfeiture of $65 million along with surrendering asses that include a substantial stash of 3,800 Bitcoins worth $100 million and additional assets.

On 3rd October, the US attorney for New York sentenced Scott Hughes, Cecilia Millan, and Karina Chairez months after they each pleaded guilty. The three pleaded guilty to money laundering and other charges Airbit Club accumulated since 2015. According to the details of the proceeding, Hughes had laundered at least $18 million in the crypto Ponzi scheme. His crimes have resulted in 18 months in prison.

airbit-club
Don Santos(left) and Pablo Rodriguez(Right) were the master minds behind the Airbit crypto scam.[Photo/Medium]
The court then sentenced Millan, a senior-level promoter of Airbit Club, to five years in prison. His active role in promoting the crypto scam played a huge part in the losses. The judge sentences Chairez, a senior-level promoter, to one year and one day in prison. 

Also, Read Department of Justice, G20 Finance Stability Board stepped up scrutiny on crypto assets.

Furthermore, since Hughes is a known scammer, he was given an additional three years of supervised release. Millan and Chairez received three years and three months respectively. U.S. Attorney Damian Williams stressed that these three perpetrators played an active role in growing Airbit Club’s clientele.

He said, “At the top-tier of promoters, Millan and Chairez for years aggressively solicited investments from and misled hardworking and unsophisticated investors to line their own pockets.” Williams added, “Today’s sentences send a message that anyone who facilitates cryptocurrency investment schemes — not only those at the top of the pyramid — will face serious consequences for such crimes.”

Dos Santos will hear his sentence on 4th October, but the judge has stated he may experience a similar sentence to his accomplice Rodriguez.

Conclusion

This crypto Ponzi scheme is one among many demerits of the industries highlighting the dangers of a crypto scam.

Despite this, their sentences will serve as a warning to all who try to take advantage of the freedom the crypto industry offers. The US SEC has stated that their recent actions are to ensure that such scenarios never occur. Despite many claims of the US SEC trying to control the industry, the dangers it faces are a fact. 

Also, Read The perpetrator of the OneCoin Pyramid Scheme resurfaces.

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Ken Mutuku
Ken Mutuku
Your Guide to the Future of Tech, Web3, and Digital Storytelling. With a keen eye for detail and a knack for concise communication, Ken Mutuku is your go-to professional for decoding the next wave of technological evolution. Whether through captivating videos, insightful articles, or engaging presentations, he masterfully crafts messages that deeply resonate with his audience, setting him apart in the digital landscape.
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