BitClub Programmer Admits Mining Scheme Stole $722M in Bitcoin
Balaci’s testimony indicates that BitClub never ran the lucrative bitcoin mining pools it lured victim investors with. (Shutterstock)
A 35-year-old Romanian programmer of the Bitclub Network pleaded guilty on Thursday to his role in establishing the mining pool Ponzi scheme that defrauded investors of hundreds of millions of dollars in bitcoin.
- The programmer, Silviu Catalin Balaci, confirmed in his plea that BitClub had indeed wreaked the economic damage that prosecutors accused the mining pool’s principals of committing: $722 million in stolen bitcoin over five years.
- Balaci’s testimony indicates BitClub never ran the lucrative bitcoin mining pools it lured victim investors with between April 2014 and December 2019. Instead, Balaci said he inflated the website’s mining activity to fool the “sheep” into sticking around.
- Balaci said he assisted Matthew Brent Goettsche and Russ Albert Medlin in setting up the network as its programmer. Goettsche has been in custody since December; Medlin, a fugitive, was arrested on sex charges in Indonesia in June. Balaci was recently arrested in Germany, according to a Department of Justice press release.
- Under the plea agreement, Balaci faces a maximum five-year sentence and $250,000 fine.
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