Thomas Dluca is one of four named defendants in a March 2018 FTC filed lawsuit.
The lawsuit specifically alleges Dluca is the founder of the Bitcoin Funding Team gifting scam. He is also accused of promoting the My7Network pyramid scheme.
Despite the granting of a TRO and preliminary injunction, to date Dluca has failed to comply with either.
Subsequently, the FTC has now filed a motion requesting Dluca be held in contempt.
Citing the provision of “ample notice” and “ample opportunities” for Dluca to correct injunction compliance deficiencies, the FTC allege he has failed to
- submit sworn financial and cryptocurrency disclosures
- disclose salary/wages for his spouse
- disclose the purchase price for two vehicles
- product all requested bank statements for personal and business bank accounts
- produce federal tax returns
- product appraisals on real or personal property
- produce business documents (tax returns, balance sheets, annual and year-to-date income statements, general ledgers)
- provide public keys for his cryptocurrency wallets
- detailed accounting of every marketing program promoted since January 2014
- distribute a copy of the granted preliminary injunction to each of his downline
- provide the FTC with a sworn statement of compliance with all of the above
The FTC has requested a show cause hearing, at which Dluca will no doubt be grilled.
Ultimately, should the Court agree that Defendant Dluca has violated the Preliminary Injunction as described in this Motion, Plaintiff will request that the Court enter an order requiring Defendant Dluca to take the following steps within five days of entry of the order or face sanctions by the Court.
In related news Dluca and fellow defendants Eric Pinkston and Scott Chandler, each filed opposition to their having to liquidate held cryptocurrency assets.
The basic argument raised is that “cryptocurrency will continue to rise because it has done so in the past”.
“The FTC’s skepticism is born out of unfamiliarity with a relatively new and game-changing technology that can be used as an online currency”, implying that anyone who truly understands cryptocurrency will understand that its value is only going to rise.
Rather than be drawn into a speculative argument about the future of cryptocurrency, the FTC claims ‘the long-term prospects for cryptocurrency should not be relevant to this issue‘.
The FTC will not make predictions about the long-term prospects of cryptocurrency in the narrow context of this litigation.
The FTC has neither stated nor implied that it is “skeptical” about cryptocurrency; instead, it has simply brought to the Court’s attention cryptocurrency’s well-documented short-term volatility and vulnerability to hacking and loss.
This case will be resolved in the short-term. Therefore, it is cryptocurrency’s short-term volatility that is relevant.
Defendants are free to invest non-frozen assets in cryptocurrency if they believe cryptocurrency can only rise.
They should not be permitted to use frozen assets to speculate in cryptocurrency.
Decisions on Dluca’s show cause hearing and the cryptocurrency liquidation opposition motions are pending. Stay tuned…