A U.S. district court has ordered $17 million to be paid to 800 victims affected by BitConnect fraud.
The funds will be divided and distributed to victims worldwide in order to provide closure to individuals harmed by BitConnect's activities between 2016 - 2018.
BitConnect's actions affected thousands of cryptocurrency traders, and many lost their life savings in BitConnect's $2.4 billion scheme.
Bitconnect victims to receive restitution split from $17 million
800 victims of BitConnect ’s fraudulent activities will receive $17 million in restitution. A San Diego court issued the order to assist victims in regaining part of what they may have lost as a result of BitConnect's operations between 2016 - 2018.
In 2021, Glen Arcaro, a promotor for BitConnect pleaded guilty to conspiracy to commit wire fraud. In 2022, BitConnect’s founder Satish Kumbhani was indicted for the part he played in the fraudulent scheme.
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.
BitConnect tricked investors into using their services by promising high returns with fake BitConnect trading bots and compound interest-earning schemes.
The interest schemes required BitConnect users to buy BitConnect Coin and store the fraudulent coin for long periods of time in exchange for up to 3,700% annual returns.
BitConnect's Ponzi scheme collapsed in 2018 after plundering $2.4 billion from cryptocurrency investors worldwide. Some key players behind BitConnect have yet to be found and charged for their crimes.