800 victims of the BitConnect Ponzi scheme are set to receive a share in $17 million recovered through restitution.
As per a January 12th press-release from the DOJ, the $17 million appears to be restitution recovered from Glenn Arcaro.
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.
Arcaro (right) pled guilty to BitConnect fraud charges in 2021. He also settled parallel charges brought by the SEC in early 2022.
In September 2022, Arcaro was sentenced to 38 months in prison.
BitConnect was a ~$2.4 billion Ponzi scheme run by Indian national Satish Kumbhani. Kumbhani was indicted in February 2022.
Indian authorities have arrested Kumbhani twice. In 2019 the FBI even managed to secure time to interrogate him.
Owing to failures of the Indian legal system, Indian authorities released Kumbhani (right) on both occasions.
In February 2022 the SEC confirmed Kumbhani had fled India. In August 2022, Indian authorities filed a third BitConnect related case against Kumbhani.
Kumbhani is believed to have fled to MLM crime capital of the world Dubai. He remains a wanted fugitive in both India and the US.