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The Federal Trade Commission is going after the creator of the iBackpack, Doug Monahan, who used the crowdfunded money towards a variety of personal expenses, including the purchase of Bitcoin.
According to the Verge, the Federal Trade Commission has taken legal action against the operator of a deceptive crowdfunding scheme, Doug Monahan, who allegedly raised more than $800,000 from consumers through four different crowdfunding campaigns, falsely claiming the funds would be used to develop a handful of products, such as the smart iBackpack.
Instead the backpack creator used the crowdfunded money toward a variety of personal expenses, including the purchase of Bitcoin, personal ATM withdrawals, and to pay off his credit cards.
Director of the FTC’s Bureau of Consumer Protection said that if you raise money by crowdfunding, you don’t have to guarantee that your idea will work.
'But you do have to use the money to work on your idea, or expect to hear from the FTC', he added.
The FTC is apparently seeking refunds for those who funded the products and a permanent injunction to prevent Monahan from ever using crowdfunding platforms again.
FTC sues smart backpack creator for allegedly using crowdfunded money to buy bitcoin: The Federal Trade Commission is suing a man for allegedly running off with more than $800,000 he raised on crowdfunding… https://t.co/UNZTZ5DZQy #TheResistance #ImpeachTrump #NotMyPresident pic.twitter.com/BnUsY6DA93
— Patrick (@cahulaan) May 6, 2019