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Bitconnect Victims To Receive Over $17 Million In Restitution From Ponzi Scheme

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Bitconnect Victims To Receive Over $17 Million In Restitution From Ponzi Scheme

More than $17 million in restitution will be distributed among investors in the pyramid scheme Bitconnect under a court order in the United States. The notorious crypto investment scheme defrauded thousands of people around the world.

Bitconnect Investors From Dozens of Countries to Be Paid Back Millions of US Dollars

A total of over $17 million in restitution will be returned to around 800 victims from more than 40 countries who lost money to Bitconnect, the U.S. Department of Justice (DOJ) announced Thursday, quoting an order issued by a federal district court in San Diego. The large-scale crypto investment scheme defrauded thousands of investors globally.

The ruling comes after on Sept. 16, 2021, the top U.S.-based promoter of Bitconnect, 44-year-old Glenn Arcaro, pleaded guilty to conspiracy to commit wire fraud. He admitted to marketing Bitconnect’s initial coin offering and digital currency exchange as a lucrative investment with the goal to exploit investor interest in cryptocurrency.

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Arcaro and his co-conspirators misled investors about Bitconnect’s “Lending Program” and its purported proprietary “Bitconnect Trading Bot” and “Volatility Software” technologies which, as they claimed, could generate guaranteed returns on investors’ money used to trade on crypto exchange markets.

“In truth, however, Bitconnect operated a textbook Ponzi scheme by paying earlier Bitconnect investors with money from later investors. Arcaro and his co-conspirators ensured that up to 15% of the money invested into Bitconnect went directly into a slush fund to be used for the benefit of its owner and promoters,” the DOJ explained.

Glenn Arcaro, a resident of Los Angeles, was sentenced to 38 months in U.S. federal prison in September of 2022. He admitted to earning at least $24 million from the scam. At the time, the DOJ pointed out that all of that money will be repaid to investors or forfeited to the government. In November, the previous year, the Justice department had offered for sale $56 million worth of crypto assets seized from Bitconnect.

The crypto pyramid’s founder, Indian national Satish Kumbhani, was indicted on Feb. 25, 2022 for his key role in organizing the $3.4 billion fraud scheme. In August, police in India launched an investigation into Bitconnect and a search for its mastermind. If convicted in the U.S., he would face a maximum of 70 years in prison.

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BitConnect, Court, Crypto, crypto pyramid, Cryptocurrencies, Cryptocurrency, DOJ, Fraud, Investors, Ponzi Scheme, Pyramid, Pyramid Scheme, Restitution, Scam, U.S., US, Victims

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Do you think Bitconnect investors will receive further compensation for their losses to the Ponzi scheme? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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2016 Bitfinex hack

Feds Seize $34 Million In Crypto From Unidentified Florida Man

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Feds Seize $34 Million In Crypto From Unidentified Florida Man

On April 4, 2022, the Department of Justice (DOJ) and the U.S. Attorney’s Office of South Florida revealed that law enforcement seized $34 million in crypto assets from an unidentified man living in Florida. According to the DOJ, the man allegedly conducted more than 100,000 sales on darknet markets, selling online account information tied to people’s Netflix, HBO, and Uber accounts.

DOJ Seizes $34 Million in Digital Assets From Florida Resident Accused of Selling Stolen Online Information via the Deep Web

The DOJ and U.S. Attorney’s Office of South Florida announced on Monday that $34 million in cryptocurrencies were forfeited to the federal government. The funds stem from a South Florida resident that allegedly sold online information like financial details tied to specific web services like Netflix, Uber, HBO, and many others.

Reportedly, the man took the private information to darknet markets on the deep web using the privacy-enhancing Tor browser and sold the data for crypto. The unidentified man is accused of conducting more than 100,000 sales with stolen information. While the federal authorities seized the $34 million in digital assets, the suspect from the suburban city of Parkland, Florida was not named or charged in the official press release.

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U.S. law enforcement did say it was “one of the largest cryptocurrency forfeiture actions ever filed by the United States.” According to the DOJ press release, the unidentified Parkland suspect allegedly used “tumblers,” “crypto mixers,” and “chain hopping” to conceal his proceeds. The DOJ says the man leveraged mixers and chain hops to “obscure the original source of funds.”

‘Operation TORnado’

The forfeiture action stemmed from a special operation dubbed “TORnado,” and it involves a great number of federal, state, and local law enforcement agencies. In addition to the DOJ, the “RS-CI, FBI, DEA, Homeland Security Investigations (HSI), and U.S. Postal Inspection Service (USPIS) investigated the case” as well.

U.S. law enforcement, particularly the DOJ, has been busy with various criminal cases that involve digital assets in recent times. At the end of March, the DOJ revealed the agency charged two individuals in a million-dollar “NFT rug pull” scam.

In mid-November 2021, the DOJ was dealing with the sale of $56 million in seized Bitconnect funds stemming from the crypto Ponzi’s “number one promoter.” The DOJ was also involved with the recent seizure of 94,636 BTC that came from the 2016 Bitfinex hack.

Tags in this story

2016 Bitfinex hack, accounts, bitcoin mixers, BitConnect, chain hopping, Darknet Markets, DEA, Deep Web, DOJ, FBI, Florida, Florida man, HBO, Law Enforcement, miami, Mixers, Netflix, NFT rug pull, online info, Operation TORnado, RS-CI, Tumblers, U.S. Attorney’s Office of South Florida, Uber, USPIS

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What do you think about the feds seizing $34 million in crypto from the Florida man? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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