The Federal Trade Commission began distributing $470,000 in refunds to 7,964 victims of the Bitcoin Funding Team gifting scheme on November 5, 2020. Each victim received approximately $59 through PayPal as part of the settlement.
The Federal Trade Commission initiated its lawsuit against the scheme's founders and promoters, Scott Chandler, Louis Gatto, Thomas Dluca, and Eric Pinkston, in 2018. The agency alleged the Bitcoin Funding Team operated an illegal pyramid scheme. It falsely presented itself as a legitimate peer-to-peer donation network using cryptocurrency. Participants were encouraged to "gift" Bitcoin to earlier members, with promises of substantial returns as new recruits joined.
Rather than contest the FTC's allegations in court, the defendants opted to settle the case in August 2019. Individual settlement agreements detailed judgments totaling millions of dollars against the promoters. However, the actual monetary awards designated for victim restitution fell significantly short of those figures.
This discrepancy between the nominal judgment amounts and the funds ultimately recovered for victims is a frequent challenge in fraud cases. Assets are often dissipated, hidden, or spent by the time legal action concludes, limiting the pool available for restitution. The FTC's efforts focused on retrieving what funds were accessible.
The refund process, announced in a November 4th press release, involved 7,964 individual payments sent via PayPal. Recipients had a 30-day window to accept their refund once issued. Payments not claimed within this period typically revert to the FTC for potential redistribution or to cover administrative costs.
Former participants in the Bitcoin Funding Team scheme who believe they are entitled to a refund or require further details were directed to contact the FTC's refund administrator directly.