Business 16 April 2018

Erik Gibbs

UK man linked to $36M Bitcoin scam extradited to US

After being on the lam for a couple of years, a British man linked to cryptocurrency fraud has been brought back to the United States to face a judge. Renwick Haddow exchanged his Mediterranean home for a New York jail cell and is looking at two charges of wire fraud, the U.S. Department of Justice announced last Friday. If everything goes well, he could be sentenced to up to 40 years in prison.

Haddow, 49, is accused of syphoning off over $36 million from clients who were suckered into investing in his two outfits, Bitcoin Store and Bar Works. He reportedly hired a team of sales agents who called on potential clients to convince them to invest in the companies. According to a complaint lodged by the Securities and Exchange Commission (SEC), Haddow funneled around 80% of the funds to his own accounts, and sent $1 million to a bank account in Morocco and over $4 million to bank accounts in Mauritius.

The SEC asserts that the two companies never really existed. Haddow, who went by the name of Jonathan Black in the businesses, concocted false entities, including fake executives and grossly exaggerated earnings. The director of the SEC’s New York Regional Office, Andrew M. Calamari, explained, “As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability.  In reality, Haddow controlled the companies from behind the scenes and they were far from profitable.”

Haddow created propaganda that claimed Bitcoin Store was “an easy-to-use and secure way of holding and trading Bitcoin,” investigators said. He reportedly told potential investors that the company had already picked up several million dollars, which, according to the SEC, was a blatant lie, as no records exist of the company ever having received that money. Bitcoin Store did receive money, under $250,000 in incoming payments, but paper trails revealed that none of the money came from paying customers.

The arrest warrant for Haddow was issued in July 2017. He will be tried in the Southern District Court of New York, and each count of wire fraud carries a sentence of up to 20 years. Here’s lookin’ at you, kid.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

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