29 November 2023
After much over 4 years of judicial proceedings and uncertainty, a court in California has ruled that victims of the BitConnect investment scam are entitled to a total of $17 million in compensation. Over 800 victims from over 40 different countries were awarded the reparation amount by a federal district court in San Diego for financial losses sustained in BitConnect, a massive Cryptocurrency investment program that deceived thousands of international participants. The United States District Court found that BitConnect was a fraudulent Crypto-financing platform that pushed its own technology, including the "BitConnect Trading Bot" as well as the "Volatility Software," and guaranteed investors guaranteed profits.
In 2021 on September 16th, BitConnect's main US promoter, 44-year-old Glenn Arcaro, pled confessed to conspiracy to conduct wire fraud. Similarly, BitConnect creator Satish Kumbhani was charged with leading a multibillion dollar scam on February 25, 2022. In his guilty plea, Arcaro stated that he and others had falsely promoted BitConnect's initial coin offering as well as digital currency exchange as a profitable venture, capitalizing on investors' enthusiasm for Cryptocurrencies. But in reality, BitConnect was running a classic Ponzi scam, compensating off older customers with funds from newer ones.
What is a BitConnect?
From 2016-2018, Bitconnect operated as an accessible Crypto tied to a Ponzi->
More on BitConnect Victims Scam
In September 2022, Arcaro was given a sentence of little more than 3 years in prison for lying to investors about the profitability of BitConnect's lending business. Bitconnect carried out one of the largest-scale Bitcoin scams ever. Sources indicate that over $6 billion USD, or about 325,000 Bitcoins, were sent to the scam. The Crypto site, which is no longer active, was exposed as a 2016 Pyramid scam promising unimaginably high returns on investment.
The announcement was made by FBI Assistant Director Luis Quesada, Justice Department Criminal Division Assistant Attorney General Kenneth A. Polite, Jr., U.S. Attorney for the Southern District of California Randy Grossman, and IRS Criminal Investigation (IRS-CI) Los Angeles Field Office Special Agent in Charge Tyler Hatcher. There was an investigation conducted by the FBI's Cleveland Field Office as well as the IRS-Los CI's Angeles Field Office. The inquiry would not have been possible without the help of the U.S. Postal Inspection Service and the Justice Department's Office of International Affairs.
Nonetheless, the DOJ claims that the whole platform was a "typical Ponzi scheme," in which initial participants were reimbursed with their own money. From 2016 through 2018, BitConnect functioned normally. The price of the associated Crypto coin dropped precipitously when the project was terminated. The magnitude of the issue has resulted in lengthy delays in compensation for sufferers.
Prosecutors include Mark W. Pletcher, Contract Attorney for the Southern District of California, Carl Brooker, Lisa Sanniti, and Kevin Lowell, Trial Attorney for the Criminal Division's Fraud Section. Even though it's called an "indictment," what it really is is a list of accusations. Unless conviction is shown further than a clear dispute in a criminal court, all accused have the presumption of innocence.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.