The U.S. Department of Justice will compensate BitConnect victims for the sale of $ 56 million worth of seized cryptocurrency from the BitConnect Ponzi program promoter.
According to the announcement, the government will sell the cryptocurrency and withhold the US dollar proceeds before using the proceeds to compensate victims who claim it. The cryptocurrency was confiscated from 44-year-old Glenn Arcaro, who pleaded guilty to participating in a $ 2 billion conspiracy to defraud bitConnect investors. Arcaro will be convicted on January 7, 2022 and face a maximum sentence of 20 years in prison.
Potential victims of the bitConnect program are encouraged to visit Justice.gov’s World Wide Web to learn about their rights, provide information about their victim identity and submit a report on the impact of the program. One of the biggest crypto scams of all time – BitConect poses as a huge profitable crypto investment platform based on a proprietary trading bot, but in reality this bot is no real survival. It’s a huge Ponzi program that rewards participants based on how many people have shopped into the program. The BCC cryptocurrency that emerged from this platform has grown to become one of the top 20 largest cryptocurrencies by market cap, valued at around $ 400.
After investigations by regulators in North Carolina and Texas, BitConnect closed its exchange and shortly afterwards the price of the BCC token fell below $ 30. The US SEC charged 5 of the BitConnect promoters and reached a $ 12 million settlement in August, but the SEC later sued BitConnect and its founders in the first lawsuit against the regulator. However, this is not the first time the US government has been selling seized cryptocurrencies.
In 2014, U.S. marshals sold over 30,000 BTC that was seized from a disused Silk Street darknet market, and the funds were raised by venture capitalist Tim Draper, now worth $ 1.8 billion. U.S. sheriffs sold an additional 4,000 BTC in 2020 for seized BTC valued at $ 37 million. Meanwhile, however, the value has grown to $ 240 million.