HONOLULU, Hawaii (HawaiiNewsNow) - A Waipahu woman who lost more than $60,000 in a Bitcoin investment scheme is coming forward to warn other potential investors.
“Nora” said she invested half of the money in her 401K in two Bitcoin mining companies ― BitClub Network and USI Tech, which turned out to be massive Ponzi schemes that bilked hundreds of millions of dollars from investors.
“I don’t think the money will come back but we want to see justice for what they had done," she said.
Bitcoin mining is a complicated operation. It uses high-powered computers to conduct thousands and thousands of bitcoin trades and the investor in the company gets a tiny fraction of of each transaction.
The problem was that both BitClub and USI Tech, both based on the mainland, weren’t making legitimate trades. They were simply raking in money from new investors to pay for old ones.
Nora said she was introduced to the two companies by a neighbor and a friend of a neighbor, who was promoting the schemes.
She said when she asked for her money back, the promoter told her he also was a victim.
After she called several times seeking a refund, she said he hit her with a temporary restraining order to stop her attempts to collect her money.
Law enforcement officials said they’re seeing more complaints like these as cryptocurrencies are becoming more commonplace with mainstream investors.
“In talking to the police, they are investigating a couple of these cases," said Deputy Prosecutor Scott Spallina.
“We’re talking about people losing thousands of dollars. In one case, we have an individual who lost over $100,000."
Spallina said that victim also was hit by a TRO.
“The pattern we are seeing is that the perpetrators are using TROs to quiet the victims," he said. “A TRO is a shield not a sword.”