BitConnect Victims Receive Over $17 Million in Refunds

Yesterday, the US Department of Justice released an official statement saying that a federal district court in San Diego has ordered the distribution of more than $17 million in compensation to about 800 victims of the BitConnect Ponzi scheme.

The main american promoter of BitConnect, Glenn Arcaro, pleaded guilty in 2021 and was later sentenced to 38 months in prison. In November 2021 Arcaro was seized cryptocurrencies worth $56 million.

In 2022 the founder Satish Kumbhani was also indicted, but he is still fugitive. Indian investigators confirmed that he vanished from India to relocate to another unknown country. According to the allegations, Bitconnect defrauded $2.4 billion from investors.

BitConnect was launched in 2016, and in October 2017, its BCC token was the eighth cryptocurrency in the world by market capitalization. BitConnect ran “a textbook Ponzi scheme,” paying previous investors with money from later investors. However, 15% of the proceeds were destined for a slush fund owned by the founders and promoters. BitConnect misled investors about its “Lending Program”, promising returns of 1% per day, so it was quite easy that it was a Ponzi scheme destined to implode. The crash came in 2018, when regulators shut it down.

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