The 800 investors from over 40 countries affected by the BitConnect crypto pyramid will receive compensation in excess of $17 million, according to a San Diego Federal District Court ruling.
As stated on the website of the US Department of Justice, 800 victims of the BitConnect cryptocurrency scheme will be able to return the funds invested in it and compensate for their losses. The agency said in a statement that BitConnect has positioned itself as a crypto lending platform by promoting its Bitconnect Trading Bot and Volatility Software tools. The organizers of the scheme promised investors a daily profit of 1% of the invested funds or 3,700% per annum.
In September 2021, Glenn Arcaro, chief promoter of BitConnect in the United States, pleaded guilty to conspiracy to commit wire fraud. On February 25, 2022, the alleged founder of BitConnect, Satish Kumbhani, was also charged with a multi-billion dollar fraud. Kumbhani is also being investigated by the Indian police, but his whereabouts are unknown.
Law enforcement found out that the money coming into BitConnect was paid out to earlier investors. In addition, 15% of the funds raised went directly to a special purpose reserve fund, which was used for the needs of the founder and main promoters of BitConnect.
Recall that in November 2021, the US Department of Justice managed to sell crypto assets confiscated from the “promoter” of the BitConnect pyramid in the amount of $56 million. After that, the department began searching for victims who lost funds in this project.
Source: Bits
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