VBit Technologies Crypto Scandal Keeps Investors Unable to Access $11 Million in Bitcoin

The cryptocurrency boom has brought a wave of new endeavors that promise to make money. But while there are many legitimate investment opportunities out there, scams are also common. That apparently includes VBit Technologies, a company currently facing legal action on several fronts.

People were excited when VBit Technologies first appeared. It was a new venture led by a Philadelphia entrepreneur who promoted bitcoin mining as something that would bring massive returns for investors. And when it started, it did just that, bringing in huge profits for those involved.

Because of its early success, thousands joined and even reinvested their earnings, buying various mining packages to collect thousands of dollars a month. Many clients even brought others into the fold, encouraged by VBit’s pyramid-like “affiliates.”

However, it declined after the company was sold.

Don Vo, founder and CEO of VBit Technologies, sold it to a Chinese company for $105 million. And after the sale, he disappeared, leaving customers trapped and desperate as they eventually lost access to $11 million worth of Bitcoin in inaccessible company-controlled accounts.

While the fact that the accounts were fully controlled by the company should have been an early warning sign, the 15,000 or so investors were blinded by success.

With crypto shooting in 2021, everyone involved was making money, and VBit made it easy for everyone to get in on the hype. It allowed customers to buy into a powerful computer meant to mine Bitcoin and gave them a share in return. Essentially, it provided the exciting returns to the industry without complications.

But when crypto started crashing, things changed and payouts started taking longer when investors wanted to make withdrawals. Instead of hours, they started taking days, then weeks. Eventually, things froze up completely, and successor company Advanced Mining Group reported that it would no longer be able to serve the US market.

At the time, Advanced Mining Group disclosed an SEC investigation, which it cited as the reason behind the cessation of withdrawals and sales. And despite promising to refund customers for their mining packages, the company went silent and no longer communicated with panicked investors.

However, the SEC investigation was not the only instance of scrutiny against the company. In 2020, Don Vo, then CEO of VBit, was ordered to cease operations in Washington and repay 82 customers worth $156,000.

The argument was that VBit was selling unregistered securities because of the way they operated. Vo cooperated, but that didn’t stop VBit from expanding and continuing to do the same elsewhere.

That is not the end of the legal problems that VBit Technologies is facing. The Norwegian Financial Supervisory Authority clamps down on the company. In addition, it faces complaints to the SEC and a federal lawsuit alleging securities fraud. The words “Ponzi scheme” are even thrown around.

While the massive scandal is a blow to investors, it is not the first of its kind. Crypto oversight is notoriously thin, and fraud is a common occurrence in the ever-burgeoning industry. It’s to the point that the Federal Trade Commission has given estimates of at least $1 billion in losses related to crypto scams since last year.