According to Cointelegraph, the co-founder of AirBit Club, a cryptocurrency pyramid scheme that defrauded investors of over $100 million, has been sentenced to 12 years in prison. The sentencing comes nearly seven months after the co-founder pleaded guilty to wire fraud conspiracy charges in a United States District Court in March.

In a statement on September 26, Damian Williams, United States Attorney for the Southern District of New York, said the co-founder "preyed" on unsophisticated investors with false promises that their funds were invested in legitimate cryptocurrency trading and mining operations. Instead, the co-founder hid victims' money in a complex laundering scheme using Bitcoin, an attorney trust account, and international front and shell companies, using the victims' money for personal gain.

District Court Judge George B. Daniels imposed an additional three years of supervised release for the co-founder, which will follow the 12-year prison sentence. The convicted fraudster was ordered to pay a forfeiture of $65 million and to forfeit other items, including a total of 3,800 Bitcoins (worth $100 million), a residence in California, $900,000 in U.S. dollars seized from the property, and nearly $1 million previously held in escrow for a Gulfstream Jet.

The other defendants in the case have also pleaded guilty and are awaiting sentencing verdicts. AirBit Club was launched in 2015, and prospective investors were told that the club earned returns on cryptocurrency mining and trading, with victims promised passive, guaranteed daily returns on any membership purchased. However, as early as 2016, club members wishing to withdraw proceeds were met with excuses, delays, and hidden fees and told they must recruit new members if they wanted to receive the returns. The operators of the club, including the co-founder, were charged with fraud and money laundering by the Department of Justice in August 2020 after a probe by the United States Homeland Security Investigations. In 2022, $7.6 billion in funds were lost to cryptocurrency Ponzi and pyramid schemes, according to a report by blockchain intelligence firm TRM Labs.