After a verdict of the US Court, $17 million will be distributed among 800 fraud victims of the BitConnect Crypto Ponzi Scheme.
The ruling comes after on Sept. 16, 2021, the top U.S.-based promoter of Bitconnect, 44-year-old Glenn Arcaro, pleaded guilty to conspiracy to commit wire fraud. He admitted to marketing Bitconnect’s initial coin offering and digital currency exchange as a lucrative investment with the goal to exploit investor interest in cryptocurrency.
Arcaro and his co-conspirators misled investors about Bitconnect’s “Lending Program” and its purported proprietary “Bitconnect Trading Bot” and “Volatility Software” technologies which, as they claimed, could generate guaranteed returns on investors’ money used to trade on crypto exchange markets.
As part of Arcaro’s plea, he admitted to conspiring with others to exploit investor interest in cryptocurrency by fraudulently marketing BitConnect’s initial coin offering and digital currency exchange as a lucrative investment. Arcaro and co-conspirators misled investors about BitConnect’s “Lending Program.” Under this program, Arcaro touted BitConnect’s purported proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” as being able to generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets.
In truth, however, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors. Arcaro and his co-conspirators ensured that up to 15% of the money invested into BitConnect went directly into a slush fund to be used for the benefit of its owner and promoters.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Randy Grossman for the Southern District of California, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, and Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
The FBI Cleveland Field Office and IRS-CI Los Angeles Field Office investigated the case. The Justice Department’s Office of International Affairs and U.S. Postal Inspection Service provided indispensable assistance to the investigation.
Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Carl Brooker, Lisa Sanniti, and Mark W. Pletcher and Contract Attorney Mark McDonald for the Southern District of California are prosecuting the case.
This verdict has arrived after on Sept. 16, 2021, the top U.S.-based promoter of Bitconnect, 44-year-old Glenn Arcaro, pleaded guilty to conspiracy to commit wire fraud. He admitted to marketing Bitconnect’s initial coin offering and digital currency exchange as a lucrative investment with the goal to exploit investor interest in cryptocurrency.
