The founder of the Bitclub Network admitted charges against him of selling unregistered securities and filing a false tax return. The damage from Bitclub's actions is estimated at $722 million.

US citizen Joseph Frank Abel pleaded guilty to organizing a $722 million scam during a court hearing held in the format of a videoconference. He admitted to conspiring to offer and sell unregistered securities and to subscribing to a false tax return in connection with his role in the BitClub Network. He became the second creator of Bitclub to admit the charges against him. In July this year, Romanian citizen Silviu Catalin Balaci also pleaded guilty. In addition to Abel and Balaci, charges were brought against Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks.

The charges were brought against Abel in December 2019. According to the US attorney's indictment, Abel, along with four other defendants, organized Pomzi scheme "taking money from investors in exchange for shares of the BitClub Network’s purported mining pools." In addition, the scheme "rewarded investors for recruiting new investors into the scheme." The statement reads that Abel, who acted as a large-scle promoter of the Ponzi scheme, "promoted and sold shares of BitClub Network despite knowing that the network and its operators did not file a registration statement to register shares with the U.S. Securities and Exchange Commission."

“Goettsche, Balaci, Weeks, and others conspired together to solicit investment in BitClub Network through fraudulent means, including by providing false and misleading figures that BitClub investors were told were “bitcoin mining earnings” purportedly generated by BitClub Network’s bitcoin mining pool."

Under US law, the conspiracy charge to which Abel pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. The tax charge to which Abel pleaded guilty carries a maximum penalty of three years in prison and a fine of $100,000. Sentencing is scheduled for January 27, 2021.

Bitclub was launched in April 2014 and operated until December 2019. The Ponzi scheme targeted retail investors in Asia, Africa and Europe.