South Philadelphia crypto company hit with more lawsuits, detailing a pyramid-like rewards system

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Daily News | South Philadelphia crypto company hit with more lawsuits, detailing a pyramid-like rewards system

Headquartered in an unassuming brick building along Washington Avenue, VBit Technologies says it was sold to Chinese company Advanced Mining Group — a firm with no public filings — earlier this year for $105 million. By June, when customers began to notice that the Bitcoin in accounts VBit controlled was inaccessible, one former executive estimated the company had around 15,000 investors worldwide.

A class-action lawsuit filed in November in Delaware alleges that VBit “functioned as a massive Ponzi scheme that paid out the promised Bitcoins only as long as new victims provided additional funds to do so.” “Our clients’ complaint alleges the defendant companies and individuals formed an illegal enterprise that involved luring innocent victims with false promises that they could safely acquire cryptocurrency through Bitcoin mining,” said Josh Snyder, an attorney representing Dettmering and Mangubat.

According to the filing, the men purchased mining packages and hosting services worth a combined $216,000. Such large investments were common, with other customers who took out thousands of dollars in loans to afford a packagethey were now struggling to pay back their debt as their money remains frozen.

“You will be encouraged to purchase an item that we like to call a conversation starter,” said a VBit salesperson while speaking to affiliates in a recruitment video on on the company’s YouTube, suggesting men use their spending spree to purchase Brietling watches and Hermes belts and that women purchase Christian Louboutin shoes and Chanel purses.

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