More than $17 million in restitution will be distributed among investors in the pyramid scheme Bitconnect under a court order in the United States. The notorious crypto investment scheme defrauded thousands of people around the world.
Bitconnect Investors From Dozens of Countries to Be Paid Back Millions of US Dollars
A total of over $17 million in restitution will be returned to around 800 victims from more than 40 countries who lost money to Bitconnect, the U.S. Department of Justice (DOJ) announced Thursday, quoting an order issued by a federal district court in San Diego. The large-scale crypto investment scheme defrauded thousands of investors globally.
The ruling comes after on Sept. 16, 2021, the top U.S.-based promoter of Bitconnect, 44-year-old Glenn Arcaro, pleaded guilty to conspiracy to commit wire fraud. He admitted to marketing Bitconnect’s initial coin offering and digital currency exchange as a lucrative investment with the goal to exploit investor interest in cryptocurrency.
Arcaro and his co-conspirators misled investors about Bitconnect’s “Lending Program” and its purported proprietary “Bitconnect Trading Bot” and “Volatility Software” technologies which, as they claimed, could generate guaranteed returns on investors’ money used to trade on crypto exchange markets.
“In truth, however, Bitconnect operated a textbook Ponzi scheme by paying earlier Bitconnect investors with money from later investors. Arcaro and his co-conspirators ensured that up to 15% of the money invested into Bitconnect went directly into a slush fund to be used for the benefit of its owner and promoters,” the DOJ explained.
Glenn Arcaro, a resident of Los Angeles, was sentenced to 38 months in U.S. federal prison in September of 2022. He admitted to earning at least $24 million from the scam. At the time, the DOJ pointed out that all of that money will be repaid to investors or forfeited to the government. In November, the previous year, the Justice department had offered for sale $56 million worth of crypto assets seized from Bitconnect.
The crypto pyramid’s founder, Indian national Satish Kumbhani, was indicted on Feb. 25, 2022 for his key role in organizing the $3.4 billion fraud scheme. In August, police in India launched an investigation into Bitconnect and a search for its mastermind. If convicted in the U.S., he would face a maximum of 70 years in prison.
Do you think Bitconnect investors will receive further compensation for their losses to the Ponzi scheme? Tell us in the comments section below.
https://news.bitcoin.com/bitconnect-victims-to-receive-over-17-million-in-restitution-from-ponzi-scheme/
