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HS-008 Cloud mining fraud · Poland / Cyprus (global operations) 2022

MiningCity — A Three-Year Bitcoin Mining MLM That Burned Through $300 Million and Vanished Into Dubai

cloud-miningarrestedcollapse-era
Operation
MiningCity
Investor Losses
~$300M estimated (investor community data; no adjudicated total)
Contracts Sold
1,100-day Bitcoin and Bitcoin Vault hashrate packages, $300–$12,600 tiers
Status
Arrested

Summary

MiningCity (miningcity.com) was a global Bitcoin cloud mining scheme operated primarily by Grzegorz Rogowski — publicly presented as "Gregory Rogowski" or "Greg Strong" — and backed by Eyal Avramovich, who owned both MiningCity's parent company Prophetek Ltd. and MineBest, the Warsaw-based mining firm that provided the infrastructure narrative. Launched in mid-2019, MiningCity sold 1,100-day hashrate contracts denominated in Bitcoin and, from late 2019, in Bitcoin Vault (BTCV), a proprietary token created by MineBest. The scheme raised an estimated $300 million from investors concentrated in Japan, South Korea, Vietnam, and the Philippines, plus a substantial European and Latin American base. It paid returns using new investor funds rather than genuine mining proceeds and collapsed in late 2022 when withdrawal access was restricted and then effectively eliminated, leaving investors with illiquid BTCV tokens on a platform called iMine that Avramovich subsequently merged with the remnants of the MiningCity operation. Multiple securities regulators — including those of the Philippines, the United Kingdom, Canada, Cyprus, South Africa, and Poland — issued formal fraud warnings between 2020 and 2024. As of the date of this filing, Rogowski is believed to have relocated from Poland to Dubai; Avramovich's whereabouts are similarly uncertain. No confirmed US court filing or criminal indictment against MiningCity, Rogowski, or Avramovich has been located in public records, though the scheme's scale and multi-jurisdictional regulatory findings place it among the largest cloud mining MLM frauds of the 2019–2022 period. The Status designation of Arrested reflects the ROSTER's classification based on information available at the time of compilation; no specific arrest event has been independently confirmed in the public record as of the date of this filing.

The scheme differentiated itself from straightforward cloud mining contract frauds by embedding a multi-level marketing compensation structure that made investors into recruiters and created powerful social incentives to bring in new participants and suppress internal dissent. Unlike HashFlare or BitClub Network, which sold contracts to passive investors, MiningCity built a sales organisation of participants who earned commissions on their recruits' investments — converting every investor into a potential promoter whose financial interest was aligned with growing the pool of new depositors.

Timeline

Mid-2019
MiningCity launches
Grzegorz Rogowski publicly presents MiningCity as CEO. Investment packages from $300 to $12,600 are offered, promising 1,100-day daily returns sourced from Bitcoin mining operations administered by MineBest. Traffic is initially concentrated in Japan, South Korea, Vietnam, and the Philippines.
December 2019
Bitcoin Vault (BTCV) introduced
MineBest launches Bitcoin Vault, a proprietary cryptocurrency presented as more secure than Bitcoin due to a 144-block reversal window. MiningCity begins redenominating new mining packages in BTCV, creating a dual-token structure that benefits Avramovich's connected interests across both companies.
2020
Global regulatory warnings begin
The Philippines SEC formally identifies MiningCity as a Ponzi scheme and warns against investment, citing Rogowski by name. The Ontario Securities Commission, UK Financial Conduct Authority, South African FSCA, and other regulators issue parallel warnings across multiple continents.
2020
Rogowski falsely claims Philippine SEC registration
In a MiningCity webinar, Rogowski states the company has obtained a license from the Philippine SEC. The Philippine SEC publicly contradicts this claim, confirming the company remains unregistered.
2020–2021
Scheme expands despite warnings
Regulatory warnings do not halt recruitment. MiningCity's multi-level structure continues to generate new deposits, particularly in Southeast Asia and Latin America, where local promoters receive commissions that incentivise ongoing recruitment.
October 2022
Withdrawal restrictions introduced and iMine announced
MiningCity begins restricting investor withdrawals. On October 6, 2022, Avramovich announces a "strategic alliance" with iMine, a new platform headed by Portuguese-based puppet CEO Jorge Mesquita. Investors are effectively transferred into the iMine system.
Late 2022
MiningCity effectively collapses
The operational platform ceases normal function. Social media accounts are locked. Investor communities report total inability to recover funds. BTCV tokens held by investors lack liquid markets.
2022–2024
Cyprus SEC warning issued
CySEC formally warns that MiningCity's website does not belong to an entity licensed to provide investment services, consistent with earlier multi-regulator findings. iMine similarly fails to gain investor traction.
2023–2024
Operators relocate
Reporting in MLM fraud research communities indicates Rogowski has left Poland, with Dubai identified as a probable destination. Avramovich is similarly believed to have departed Poland. No confirmed law enforcement action is documented in public records as of this filing.
2024–2026
No confirmed prosecution
Despite six or more national securities regulators having issued formal fraud warnings, no criminal arrest or indictment of Rogowski, Avramovich, or any other MiningCity operator has been confirmed in publicly accessible court or law enforcement records as of the date of this filing.

The MLM Engine: How MiningCity Differed From Ordinary Mining Fraud

The structural innovation that distinguished MiningCity from its cloud mining fraud contemporaries was the depth and sophistication of its multi-level marketing compensation architecture. Purchasing a mining package was not simply an investment; it was an entry point into a tiered sales organisation. The compensation plan operated on a hybrid unilevel model in which direct recruits generated five percent commissions for the first five referrals and ten percent thereafter, with additional unilevel commissions cascading down between ten and thirty levels depending on the investor's rank within the organisation.

The rank system — progressing from Citizen through City Builder, City Developer, City Manager, Chief Manager, and higher tiers — required each participant to achieve personal and downline investment volume thresholds. Investors at higher ranks had committed more capital and recruited larger downline networks whose funds were equally at risk. The effect was a powerful silencing mechanism: participants who had advanced through the ranks had a financial interest in the platform's apparent success and a social accountability to those they had recruited. Public expressions of scepticism threatened not only their own investment but their entire downline's capital and the relationships through which it had been solicited.

The daily commission cap varied by rank, reaching $2,800 per day at the highest levels — numbers that attracted ambitious promoters willing to recruit aggressively. This design concentrated the scheme's most effective salespeople at the top of the structure while ensuring they had the most to lose from exposing its Ponzi mechanics.

Bitcoin Vault and the Exit Token Strategy

The December 2019 introduction of Bitcoin Vault (BTCV) as the denomination currency for new MiningCity contracts was not a product decision — it was an exit architecture. BTCV was created and controlled by MineBest, owned by Avramovich, who also owned MiningCity through Prophetek Ltd. By redenominating investor returns from Bitcoin into BTCV — a proprietary token whose value depended entirely on Avramovich's continued market support — the operators shifted the fraud's liability structure in a way that benefited them at every stage.

While BTCV traded at elevated prices during the Bitcoin bull market of 2020–2021, investors who received BTCV payouts appeared to be receiving valuable returns. When the BTCV market deteriorated — as it inevitably would for a token with no independent utility or demand base — investors discovered that the accounting value they had been shown on their MiningCity dashboards could not be converted to liquid cryptocurrency at anything approaching the stated rate. The BTCV mechanism thus allowed the operators to claim, at any given moment, that returns were being paid in full, while the actual value available to investors on exit was a fraction of the nominal figure.

The October 2022 iMine merger completed this strategy. By routing the investor base into a new platform controlled by the same beneficial owner, the operators acquired additional time before final collapse while retaining control of the residual investor pool. iMine's failure to attract new investment meant it could not sustain even the minimal appearance of activity that MiningCity had maintained, and by late 2022 the scheme was functionally closed.

The Five Factors

01
MLM Structure as Regulatory Camouflage
By embedding the investment offering within a multi-level marketing compensation plan, MiningCity's operators created ambiguity about whether the product being sold was a "mining service" or a "securities offering." MLM structures are regulated primarily as direct selling, not as securities, in most jurisdictions, and the complexity of the compensation plan made it harder for any single regulator to immediately categorise the scheme and act. The six-plus regulator warnings across four years reflect the time it took multiple agencies to independently reach the same conclusion about a scheme designed to resist easy categorisation.
02
Downline Accountability as Sceptic Suppression
The rank-based structure created social bonds of accountability among participants that functioned as an internal enforcement mechanism against dissent. An investor who had recruited thirty people into their downline could not raise public doubts about the scheme without causing harm to those thirty people and damaging the relationships through which they had been recruited. This architecture did not prevent eventual loss recognition, but it delayed it long enough for the operators to extract maximum deposits and prepare their exit.
03
Proprietary Token as Value Extraction Layer
The BTCV redenomination strategy transformed genuine investor funds (Bitcoin) into an illiquid asset (BTCV) whose value was controlled by the same operator who had collected the original deposits. This mechanism allowed the operator to deliver nominal returns — measured in BTCV at operator-influenced prices — while retaining access to the underlying Bitcoin capital. The structural similarity to BitConnect's BCC token, which performed the same liquidity extraction function two years earlier, suggests deliberate design rather than operational coincidence.
04
Cross-Entity Beneficial Ownership Opacity
The formal separation between MiningCity (Prophetek Ltd., Cyprus), MineBest (Poland), and the BTCV token ecosystem created the appearance of an arm's-length relationship between an investment scheme and its mining infrastructure provider. In reality, Avramovich's beneficial ownership of all significant entities meant that capital flowed through connected structures in ways that obscured the self-dealing. Investors were told they were purchasing mining services from an independent provider; they were purchasing from a company controlled by the same individual who collected their funds.
05
Multi-Regulator Warning Fatigue
The sequence of six or more regulatory warnings — Philippines, UK, Canada, Cyprus, South Africa, Poland, and others — illustrates a specific failure mode: when warnings are issued by individual national regulators without coordination toward a specific enforcement outcome, sophisticated operators can treat each warning as a manageable reputational obstacle rather than a precursor to action. MiningCity operated for more than two years after the first national regulator warning, demonstrating that the issuance of a securities fraud alert, without accompanying enforcement capacity or criminal referral, does not necessarily halt an ongoing scheme.

Aftermath

MiningCity collapsed into iMine in October 2022, and iMine subsequently failed to attract meaningful new investment. Avramovich conducted at least one public investor-facing webinar in 2022 in which he addressed investor complaints about the MiningCity transition; the platform's social media accounts were then locked to prevent further public complaint. Rogowski, who had stepped back from public MiningCity activity citing undisclosed health issues around the time the scheme began collapsing, was subsequently reported to have relocated from Poland to Dubai. No confirmed arrest or criminal charge against Rogowski, Avramovich, or any named MiningCity associate has been identified in court or law enforcement records accessible to public research as of the date of this filing.

The estimated $300 million in investor losses is based on user community reports indicating total investments from Japan, South Korea, and Vietnam alone exceeded $300 million; the full global investor pool including the Philippines, Latin America, Europe, and other regions would increase this figure. No court-adjudicated total has been established. The investors who suffered these losses — concentrated in Asia and disproportionately drawn from working-class communities in countries with limited domestic crypto fraud enforcement capacity — received no restitution and no official acknowledgment from any law enforcement agency of their losses.

MiningCity demonstrates how the MLM compensation model can extend the life of a cloud mining Ponzi well beyond what straightforward contract fraud sustains, and how proprietary token issuance combined with multi-regulator warning environments — absent coordinated enforcement — creates safe harbour conditions for operators willing to absorb reputational damage in exchange for continued capital inflow.

Lessons

  1. Multi-level marketing compensation plans embedded in cloud mining investment schemes serve the operator's interests by creating internal social enforcement against dissent; any investment platform that pays commissions for recruiting new investors has a structural incentive to grow the deposit base regardless of whether the underlying business is viable.
  2. A proprietary platform token used to pay investment returns should be treated as a warning sign, not a feature: it removes liquidity from investor returns, gives the operator control over the effective value of those returns, and typically cannot be converted to Bitcoin or fiat at the rates implied by dashboard valuations.
  3. Regulatory warnings from multiple national securities commissions are a reliable signal that an investment scheme is operating illegally; that MiningCity continued operating across multiple continents for two years after the first formal warning demonstrates that regulatory notices alone do not resolve the risk for investors who are already committed.
  4. Beneficial ownership opacity — a corporate structure in which an investment scheme and its claimed mining infrastructure provider are controlled by the same individual through separate entities — eliminates the arm's-length relationship that would make the service contract legitimate; investors should require disclosure of beneficial ownership before committing funds to any cloud mining platform.
  5. Platforms that restrict withdrawals while simultaneously relaunching under new branding or announcing "strategic alliances" with successor entities are executing a planned exit, not resolving a liquidity issue; investors who encounter this pattern should treat it as confirmation of fraud rather than a reason to wait for resolution.

References