After a long wait of more than 4 years, victims of the BitConnect scam will probably be able to smile again. The federal court in San Diego has ordered Glenn Arcaro, the perpetrator of the Ponzi scheme, to pay the sum of $17 million. Compensation to wipe away the tears of investors harmed by a crypto scam that affected over 90 countries. The victims of this crypto fraud will finally receive a portion of their investments stolen since 2018.
Over $17 million to compensate victims of Bitconnect scam
On Thursday, January 12, the federal judge in San Diego ordered Glenn Arcaro, the principal owner of Bitconnect, the most famous crypto ponzi, to pay the sum of $17,646,801 as compensation to investors from more than 40 countries.
This sum is actually from the pocket of Glenn, the perpetrator of a Ponzi scheme that has claimed thousands of victims. This amount is only a small portion of the value of the stolen cryptos. According to the Department Of Justice (DOJ) statement on February 25, 2022, BitConnect had stolen nearly $2.4 billion from its investors.
As of November 2021, the DOJ had managed to get their hands on nearly $56 million in cryptocurrencies. These cryptos were supposed to be sold to compensate the victims. Following the current market downturn, this sum is currently only worth about $17 million.
It is reported, however, that the DOJ did not provide any details about the time period in which it sold these cryptocurrencies.
BitConnect, the crypto scam that left thousands of victims stranded in 2018
BitConnect is one of the big scandals in the crypto sector, along with FTX, Sam Bankman Fried’s exchange. Launched in 2016, the scam collapsed in 2018 leaving behind over 4,000 victims from 95 countries.
During its peak, in December 2017, its BCC token was trading for $477 and BitConnect’s marketcap had reached $3 billion. However, in January 2018, the site abruptly shut down and stripped all investors.
The Justice Department had classified the company as a Ponzi scheme. According to him, this platform was selling proprietary technology (the BitConnect trading Bot and volatility software) to give investors the illusion of guaranteed returns.
BitConnect promised an average daily interest of 1% or 3,700% per year. In 2021, the Securities and Exchange Commission (SEC) sued the two shareholders of this platform.
Glenn Arcaro, one of BitConnect’s top executives, pleaded guilty in September 2021 to fraud charges and was sentenced to 38 months in prison. As for his accomplice, Satish Kumbhani, the other founder of BitConnect, the DOJ sentenced him, in February 2022. He is also the subject of a police investigation in India.
The BitConnect scam caused significant damage to investors in over 95 countries. While BitConnect shareholders are convicted of fraud and victims are poised to receive compensation, they will almost certainly not recover their entire lost investment. The tragic example of BitConnect confirms that one should take the necessary precautions before investing in cryptocurrencies.
CEO and Editor-in-Chief of Coinpri I have been navigating the waters of Blockchain for 5 years already.
Wait, I can see the Promised Land of Adoption in the distance.