Approximately 800 victims of the BitConnect crypto investment scam will get back at least some of their funds after a San Diego Federal court ordered that $17 million be distributed to investors in over 40 different countries.
BitConnect managed to con thousands of investors out of a collective $2.4 billion by fraudulently pitching BitConnect’s ICO and crypto exchange as a sound investment.
The scheme also misled investors with its lending program, a system that BitConnect claimed would generate profits with a ‘BitConnect trading bot’ and the company’s own ‘Volatility Software.’
In reality, it was a textbook Ponzi scheme, using the funds from new investors to cover previous investor returns while directing 15% of these funds into a personal slush fund for BitConnect execs.
BitConnect founder Satish Kumbhani was indicted on February 25, 2022, for various fraud, money laundering, and market manipulation charges while still on the run from authorities. Co-conspirator Glen Arcaro pleaded guilty to conspiracy to commit wire fraud.
In November, a judge allowed the US Department of Justice to liquidate $56 million worth of seized cryptocurrency from the BitConnect proceedings. At the time it was the largest cryptocurrency seizure in the United States.