More than $17 million in restitution will be distributed among pyramid scheme BitConnect investors following a court order in the United States. The notorious crypto investment scheme defrauded thousands of people worldwide.
Millions of U.S. dollars will be repaid to Bitconnect investors in dozens of countries
The U.S. Department of Justice (DOJ) announced Thursday that it will make restitution totaling more than $17 million to nearly 800 victims in more than 40 countries who lost money to Bitconnect, citing an order issued by a federal district court in San Diego. Massive crypto investment scheme defrauded thousands of investors worldwide.
The verdict comes after 44-year-old Glenn Arcaro, the top US-based promoter of Bitconnect, pleaded guilty to conspiracy to commit wire fraud on September 16, 2021. He admitted to marketing Bitconnect’s initial coin offerings and digital currency exchanges as lucrative investments for the purpose of capitalizing on investor interest in cryptocurrencies.
Arcaro and his co-conspirators also sold Bitconnect’s “lending program” and its proprietary “Bitconnect Trading Bot,” which they claimed could generate guaranteed returns on investors’ funds used to trade in the crypto exchange market, as well as its ” Volatility Software” technology misled investors.
“In reality, however, Bitconnect operated a textbook Ponzi scheme by paying earlier investors with funds obtained from later investors; Arcaro and his co-conspirators had the idea that up to 15% of the funds invested in Bitconnect could be used for the benefit of its owners and promoters and ensured that up to 15% of the money invested in Bitconnect went directly into a slush fund that was used for the benefit of its owners and promoters,” explained the DOJ.
Los Angeles resident Glen Arcaro was sentenced in September 2022 to 38 months in a U.S. federal prison. He admitted that he made at least $24 million in fraud. At that time, the DOJ indicated that the entire amount would be repaid to investors or forfeited to the government. The previous November, the DOJ had sold $56 million worth of crypto assets seized from BitConnect.
The founder of the crypto pyramid, Indian national Satish Kumbhani, was indicted on February 25, 2022, for his key role in organizing the $3.4 billion fraud scheme; in August, Indian police launched an investigation into BitConnect and a manhunt for its ringleaders. If convicted in the U.S., he faces up to 70 years in prison.
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