Good news for BitConnect victims!
A court in California has ruled that around 800 people will be getting a slice of a $17 million pie in restitution.
The US District Court for the Southern District of California has taken a strong stance against the BitConnect case, putting an end to the fraudulent scheme. According to their ruling, the “crypto lending platform” was a sham.
The BitConnect team used shiny tools like the “BitConnect Trading Bot” and “Volatility Software” to attract investors with the false promise of guaranteed returns.
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“In truth, however, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors,” U.S. Department of Justice’s press release.
The man behind the BitConnect scam, Glenn Arcaro, has finally been brought to justice. Glenn pleaded guilty to his crimes of conspiracy to commit wire fraud in September 2021, and in September 2022, he was given a 38-month prison term as punishment for his actions.
The DOJ announced that they would be selling off $56 million worth of cryptocurrency, which they seized from the main promoter of the scheme, Glenn Arcaro, to compensate the victims.
Satish Kumbhani, the mastermind behind the BitConnect project, has managed to evade capture and is still on the run. The DOJ is after Satish, who is accused of obtaining around $2.4 billion from investors in a classic Ponzi scheme.
When apprehended, Satish faces the following charges:
Using a fancy multi-tier pyramid structure, it promised investors big rewards for bringing in new members. In October 2017, the BitConnect token, BCC, was the 8th most valuable coin in the world, with a market cap of almost $2.6 billion.
Investors were promised ‘the moon,’ with average daily returns of 1%. That’s the equivalent of turning $1,000 into $36,000 in just one year.
Big names in the crypto community, like Charlie Lee (creator of Litecoin), Vitalik Buterin (inventor of Ethereum), and Mike Novogratz of Digital Galaxy, repeatedly raised red flags and warned investors about the dangers of investing in the BitConnect project.
The BitConnect bubble finally burst in 2018 when regulators caught wind of the scheme, and the whole thing came crashing down. Investors got their BCC tokens back, but by then, the coin had plummeted from its all-time high of $500 to less than a dollar.
In September 2021, the U.S. Securities and Exchange Commission filed a separate lawsuit against the project.
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