A Des Moines financial institution is suing an Arizona company over an alleged “bitcoin scheme” that has misled consumers into investing hundreds of thousands of dollars.
BTC Capital Management, which provides investment management services, is suing Domains by Proxy in U.S. District Court for the Southern District of Iowa, alleging unfair competition and false advertising. The lawsuit claims Domains by Proxy, based in Scottsdale, Arizona, has played a role in a scheme to promote bitcoin trading through the unauthorized use of the names and likenesses of BTC Capital Management’s executive team.
The lawsuit alleges an unknown individual — identified in the lawsuit as John Doe — has solicited business in Iowa through a highly interactive website for an entity called Bitcoin Capital. The website is hosted by Domains by Proxy, and displays an address for Bitcoin Capital that is the actual Des Moines address of BTC Capital Management.
The Bitcoin Capital site also displays the names and photos of BTC executives exactly as they appear on BTC’s own website, and displays a fraudulent business registration certificate that suggests BTC’s address is home office of Bitcoin Capital.
BTC’s lawsuit says the company became aware of the scheme last fall when it began receiving phone calls from consumers about their Bitcoin Capital account. BTC then reported the website to the FBI’s Cyber Crime Division and made five separate requests to Domains by Proxy, asking that the BTC-related content be removed from the website. None of the five requests generated a response, according to the lawsuit.
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According to the lawsuit, a Florida man allegedly learned about Bitcoin Capital from someone on Facebook who directed him to the Bitcoin Capital website containing BTC’s information. The man later reported that he had been persuaded to invest more than $300,000 in the Bitcoin Capital scheme, the lawsuit states.
More recently, BTC claims, it has received a set of voicemail messages from a Canadian consumer, seemingly angry over what he believes to be BTC’s role in the bitcoin scheme. The first message involved “name calling,” the lawsuit alleges, while the second message included the statements, “We’re gonna take you down … We got you … It’s coming.”
Citing “immediate and irreparable harm” to both BTC and to people who are misled by the website’s content, BTC is seeking an injunction to block the continued use of the company’s information, as well as an award of actual damages.
Domains by Proxy has yet to file a response to the lawsuit.
