Over 800 Victims of BitConnect Crypto Ponzi Scheme To Receive $17,000,000 in Restitution, According to U.S. DOJ
More than 800 victims of the collapsed BitConnect crypto Ponzi scheme are set to receive $17 million in restitution, according to the U.S. Department of Justice.
A federal district court in San Diego ordered the restitution on Thursday, which will be distributed to victims across more than 40 countries.
BitConnect was marketed as an online crypto investment program that uses proprietary technology to generate high returns, but US securities regulators claim that the operation is a Ponzi scheme that swindled billions of dollars from investors. It was shut down in 2018.
Glenn Arcaro, the top US-based promoter for BitConnect, pled guilty to conspiracy to commit wire fraud in September 2021. A federal grand jury in San Diego indicted the investment program’s founder, Satish Kumbhani, last February.
According to the indictment, Kumbhani directed promoters of the lending program to manipulate the price of the BitConnect Coin (BCC) to create an impression that there was market demand for BitConnect’s digital asset.
Kumbhani and his conspirators also allegedly hid and relocated investors’ funds by moving the assets through internationally-based crypto exchanges using a number of cryptocurrency wallets.
In addition, Kumbhani allegedly avoided the scrutiny and oversight of BitConnect by not complying with the regulations of the financial industry, such as by not registering with the Financial Crimes Enforcement Network (FinCEN) as required by the Bank Secrecy Act.
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