Victims of Bitconnect fraud will receive 17 million
2023.01.13 03:04
Victims of Bitconnect fraud will receive 17 million
By Tiffany Smith
Budrigannews.com – A court has ordered that a group of crypto fraud victims from the BitConnect investment scheme will receive a share of a $17 million restitution. This will provide them with some respite from the multi-billion dollar fraud scheme.
According to a release issued by the Department of Justice (DOJ) on the same day, the restitution for the “massive” scheme was ordered by the United States District Court for the Southern District of California on January 12.
A small portion of the $17 million in restitution—the return of property or the monetary value of losses to the proper owner—will be available to approximately 800 scheme victims from forty countries.
According to the DOJ’s statement, Bitconnect was a crypto lending platform that advertised proprietary technology, such as the “Bitconnect Trading Bot” and the “Volatility Software,” which it claimed would guarantee investors returns.
It promised a return equal to 3,700% annually or 1% on average per day.
Investors would trade Bitconnect Coin (BCC) in exchange for Bitcoin (BTC), which could be loaned out at varying interest rates.
The DOJ wrote, however, that the platform as a whole turned out to be a “textbook Ponzi scheme,” with early investors being paid out of funds supplied by new investors.
The cryptocurrency platform went live in 2016 but went bankrupt in 2018 after stealing $2.4 billion from over 4,000 individuals from 95 nations.
In February, the DOJ brought charges against Satish Kumbhani, the alleged founder of Bitconnect. He is also the subject of a police investigation in India, and it is currently unknown where he is.
Kumbhani in an interview from 2017 (right). Image: YouTube In September 2021, the top Bitconnect promoter from the United States, Glenn Arcaro, pleaded guilty to wire fraud conspiracy charges and was ordered to repay investors $24 million.
The DOJ claims that Arcaro and others spent 15 percent of the Bitconnect investor funds on a slush fund that was used to benefit the company’s owner and other promoters.
Arcaro received a 38-month prison sentence on September 16, 2022, for his involvement in Bitconnect.
