U.S. to Sell $56 Million in Cryptocurrency to Compensate BitConnect Investors

The U.S. Department of Justice and the United States Attorney’s Office for the Southern District of California will sell cryptocurrency worth $56 million, seized from former BitConnect director and promoter Glenn Arcaro. Proceeds will go toward compensating affected investors.

The Department of Justice has described the forthcoming liquidation as the largest single restitution to date for cryptocurrency fraud.

The department is currently seeking victims of the BitConnect scheme. Payments will be issued in accordance with the forthcoming restitution order as part of Glenn Arcaro’s sentencing.

A hearing is scheduled for January 7, 2022. The defendant faces a maximum sentence of 20 years in prison.

Former BitConnect director Glenn Arcaro pleaded guilty to participating in the fraudulent scheme that duped investors out of more than $2 billion in cryptocurrency. The court ordered Arcaro to pay investors $24 million that he earned from the fraud.

Separately, the U.S. Securities and Exchange Commission (SEC) filed a civil action against BitConnect, its founder Satish Kumbhani, Arcaro and an affiliated company. The regulator accused them of an unlawful investment offering, through which they duped investors of $2 billion.

The SEC seeks the return of investors’ money with interest and civil penalties against the defendants.

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