The FTC’s lawsuit against Scott Chandler, Louis Gatto, Eric Pinkston and Thomas Dluca is turning into a bit of a circus.

At the heart of the theatrics are two core issues; Scott Chandler handing over his illgotten bitcoin and Thomas Dluca deleting incriminating emails.

As per the
granted preliminary injunction
back in April, Scott Chandler was required to turn over any bitcoin held for
liquidation
.

Chandler isn’t too happy about this, based on an unsupported assertion that he’s ‘
been investing legitimately in cryptocurrency (Bitcoin) since prior to the
‘ FTC’s case.

The FTC meanwhile are having none of it, and filed a show cause for contempt hearing motion against Chandler on October 6th.

Citing the need to hold Chandler accountable for his “serial

promotion of deceptive schemes”, the FTC argues that by not turning over his bitcoin, Chandler has and continues to violate the preliminary injunction.

It also appears that Chandler may have deleted relevant emails

in violation of Section VII, which requires production of relevant electronically stored information, and Section XII, which requires preservation of evidence.

Accordingly, this Court should hold Defendant Chandler in contempt for violating the Preliminary Injunction.

Forensic analysis of a laptop Chandler turned over to the FTC revealed one of the email accounts contained 47 unread messages as of February 13th.

When the FTC was given access to the account on June 14th, the email account contained only five messages.

Analysis of the laptop also revealed Chandler’s use of additional emails, none of which were declared or turned over.

Pertinent to Chandler’s claim of “legitimate investment” in bitcoin, the FTC linked Chandler to several cryptocurrency Ponzi schemes – in addition to those cited in their original compliant.

Chandler also had accounts at various websites that appear to contain electronically stored information about his participation in those money-making schemes, including accounts associated with the following relevant schemes:
Jet-Coin
, Hashcoinex,
 Gladiacoin
,
Bit90x
,
CoinXL
, WalletPllus,
Yota.biz
/
Vista Network
,
Ormeuscoin
, and MyDigitalBTC.

Various social networks Chandler used to participate in fraudulent schemes are also cited, none of which Chandler has declared or given the FTC access to.

It’s pretty obvious Chandler’s acquisition of bitcoin is primarily through fraudulent schemes.

I suspect when pressed Chandler will be entirely unable to convince the court of legitimate bitcoin investment. At least not any significant amount.

As per his October 15th and 16th filings, Chandler has asked for a hearing to “flesh out” ‘
the legitimate v. alleged illegitimate cryptocurrency issue/controversy
‘.

The FTC has stated it doesn’t object to Chandler’s motions, so I suspect a hearing will be scheduled to hear both the FTC’s show cause and Chandler’s stay motions together.

Returning to the topic of deleting emails, the FTC has also taken Thomas

🤖 Quick Answer

What is the FTC's legal dispute with Scott Chandler regarding bitcoin?
The FTC obtained a preliminary injunction in April requiring Scott Chandler to surrender any bitcoin holdings for liquidation as part of a lawsuit against him and three other defendants for deceptive schemes. Chandler contested this order, claiming legitimate cryptocurrency investments predated the case, leading the FTC to file a contempt motion in October.

Why did Thomas Dluca face scrutiny in the FTC case?
Thomas Dluca, named as a defendant alongside Scott Chandler and others, came under investigation for deleting incriminating emails. This deletion of evidence became a significant issue in the FTC's legal proceedings, contributing to the complications within the broader lawsuit concerning deceptive promotional activities and fraudulent schemes.

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