I feel bad for the people who got taken. But seriously, from the first I heard of it every alarm bell in my head was going off. I don’t claim any brilliant foresight, it just seemed really dodgy to me.
This one seems like a double-whammy! Apparently, these people were thinking that they were going to "invest" in a new Bitcoin exchange ("hip, sexy" topic as late as a year ago), which was to be financed via a MLM (Multi-Level Marketing, most of which are nothing more than a pyramid/Ponzi scheme with some "vertical" twist) and their income stream and/or exist strategy was going to be recruiting people for lower level.
Really, what could go wrong with this one?