800 Select Victims of Bitconnect Fraud to Receive Distriution of $17 Million
Even though thousands were affected by the massive $2.4 Billion Bitconnect fraud, a select group of 800 victims will receive a restitution distribution in the sum of $17 Million. This restitution fund represents a mere 0.7% of the total $2.4 billion BitConnect fraudulent scheme.
Allegedly, the Bitconnect scheme sucked in over 4000 victims from 95 different countries.
As per a Release from the U.S. Department of Justice, under Bitconnect's 'Lending Program', the schemes promoters pushed certain purported company proprietary technology (identified as the 'Bitconnect Trading Bot' and 'Volatility Software') as being capable of generating large profits and guaranteed returns. The promoters used investor's funds to supposedly earn profit by trading on the volatility of the cryptocurrency markets. Promise was made to the unsuspecting investors Bitconnect would return an average daily compounding interest of 1% or a whopping 3700% annual return.
Nonetheless, however, Bitconnect's operation was a textbook Ponzi scheme wherein earlier investors received payment from money invested by later investors.
On February 25, 2022, Satish Kumbhani, founder of Bitconnect, was indicted for his role in the execution of this multi-billion dollar fraud. Prosecutors in the case report Kumbhani remains at large and most likely has departed his native India for an unknown destination.
On September 16, 2021, the top U.S. based promoter for Bitconnect, Glenn Arcaro, plead guilty to the crime of conspiracy to commit wire fraud. As a required part of his plea, Arcaro admitted to the conspiracy of exploitation of investor interest in cryptocurrency by marketing Bitconnect's operations as a lucrative investment. Arcaro and his various co-conspirators diverted over 15% of investment monies into a 'slush fund' for Bitconnect's owners and promoters.
In 2022, Arcaro was sentenced for a bit over three years prison time for his role in the scheme.
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I am happy this sad story had a some what happy ending.