Federal Retreat, State Friction: $722M BitClub Case Wobbles as NH Kills $100M BTC Bond
DOJ moves toward dropping a $722M fraud prosecution while New Hampshire's council votes 3-2 against a $100M Bitcoin-collateralized bond.
Two enforcement-adjacent data points surfaced within 24 hours, pointing in opposite directions for US crypto policy. At the federal level, prosecutors appear to be walking away from a $722 million fraud case. At the state level, a $100 million Bitcoin-backed bond that had already cleared regulatory review just got voted down.
DOJ signals exit from the BitClub prosecution
Matthew Goettsche, founder of the BitClub Network mining platform, was indicted in December 2019 over an alleged scheme that drained $722 million from investors between 2014 and 2019. He was scheduled for trial in October. According to a filing reported by Bloomberg Law, Goettsche’s attorneys informed New Jersey district court Judge Claire Cecchi that the parties had “reached an agreement in principle” to resolve the charges but “need time to finalize the terms.”
Two sources cited in that report say the deputy attorney general’s office in Washington directed the New Jersey US attorney’s office to dismiss the case with prejudice. Three co-defendants — Silviu Balaci, Joseph Abel and Gordon Beckstead — have already entered guilty pleas in the same scheme, making a dismissal against the alleged lead operator a materially larger data point than a typical case closure.
The timing lines up with an April 2025 memo from Deputy Attorney General Todd Blanche instructing DOJ to stop “regulation by prosecution” in digital assets. Enforcement-risk pricing across the sector has been drifting lower since that memo circulated, and a BitClub dismissal would be one of the clearest confirmations yet.
New Hampshire’s council votes down BTC-collateralized debt
Separately, New Hampshire’s five-member executive council rejected a $100 million Bitcoin-backed bond proposal by a 3-2 margin. The structure had already passed the state’s Business Finance Authority and carried support from Governor Kelly Ayotte, with CleanSpark set to supply the Bitcoin collateral. Moody’s had assigned the bond a provisional Ba2 rating earlier this year.
The vote follows New Hampshire’s 2025 Bitcoin reserve law, so the rejection isn’t a rejection of crypto policy broadly — it’s a risk-committee call on collateral-backed municipal debt tied to a volatile asset. State representative Keith Ammon called the decision “short-sighted” and pushed for reconsideration; council members who opposed the bond cited financial-risk exposure as the deciding factor.
The split matters for positioning: federal-level enforcement softening doesn’t automatically translate into state-level fiscal risk appetite for BTC-linked instruments. Institutional access is still expanding on other fronts — Circle separately secured final approval for a US national trust bank charter, per Cointelegraph — but capital-markets gatekeepers at the state level are applying conventional credit screens regardless of the federal enforcement climate.
On the same day, Hedera-based lending protocol Bonzo Lend disclosed roughly $9 million in losses after an attacker exploited Supra’s on-chain oracle verifier, inflating SAUCE collateral pricing by around 12 orders of magnitude and draining USDC and wrapped HBAR from the pool.
Read more: Bonzo Lend Bleeds $9M as SAUCE Oracle Misprices by 12 Orders of Magnitude