A man who sold the dream of mining cryptocurrencies in the cloud was arrested last Wednesday (20th), after investigations over the last three years found his participation in a sophisticated scheme. The practice of mining cryptocurrencies is essential for them to work safely. As a result, many people have become interested in entering this industry and competing for the rewards it provides. This is because when a miner discovers a valid block on a network like Bitcoin, for example, he receives coins as a reward. Currently, a valid block of BTC provides 6.25 reward coins plus included transactions, i.e. more than BRL 1.2 million. Many people do not have the technical understanding or equipment to perform this activity. Thus, they end up looking for ready-made solutions being offered on the market, at which time the coup appears for many.
Man who sold cryptocurrency cloud mining is arrested at the Canadian-U.S. border
Buying bitcoin mining equipment is not always an easy practice. Starting in the cryptocurrency mining activity certainly involves study and should be considered a profession and investment that needs commitment to be profitable. Bitmain’s antiminer “Bitcoin Miner S19”, for example, has a value of $7,000 today. With import taxes in Brazil, this could easily go for more than R$ 50 thousand and is neither the most profitable on the market, nor the most modern today. In the Federal Senate, a bill discusses zeroing these costs, but the discussion is still at a standstill. Anyway, despite being a promising sector, many prefer the easy way out and end up bumping into proposals from the so-called “cloud mining”, a recurring problem in the cryptocurrency community that often incurs situations of scams against investors. That’s because, by promising investors receipts of earnings in bitcoin after investments, the owners of these frauds disappear with the victims’ money. And this has happened in the United States since 2019, with Chester Stojanovich being a person who offered the sale of cloud cryptocurrency mining over the internet. After raising money from investors, he used the money to pay his own expenses, living a life of luxury in hotels, even riding a limousine. So, after the number of complaints caught the attention of the FBI, he began to be investigated, even though he moved to Canada in recent months. Last Wednesday, when he tried to return to the United States, he was arrested at the border and will now stand trial for his crimes.
old fashioned fraud
US Department of Justice (DOJ) deputy Damian Williams commented that although the fraudster uses cryptocurrencies as a backdrop for his scams, this is an old-fashioned fraud. In other words, the case is nothing more than an internet fraud.
“A lot of excitement and ‘buzz’ has been generated in recent years about the ‘new world’ of cryptocurrency mining. But new financial frontiers can also create new opportunities for old-fashioned fraud. Here, Chet Stojanovich is accused of using these time-worn deception techniques on a new frontier.”
The man is suspected of having raised US$ 2 million from investors who believed they were buying cloud mining hash, a value close to R$ 10 million. Still found not guilty at the indictment stage, he could face 20 years in prison, if the court so decides.