The US Department of Justice (DOJ) and the Attorney’s Office for the Southern District of California will sell a cryptocurrency worth $56 million. The proceeds from the fraud were confiscated from the former director and promoter of the BitConnect fraudulent scheme, Glenn Arcaro. Therefore, the proceeds will compensate the affected investors.
DOJ has already called the upcoming liquidation the largest one-time compensation for damage from cryptocurrency fraud. Now the agency is looking for victims of the BitConnect scheme. The victims will receive their payments in accordance with a future court order on restitution as part of the announcement of the sentence to Glenn Arcaro.
The case is scheduled for January 7, 2022. Moreover, the defendant faces a maximum sentence of 20 years in prison.
The SEC is seeking to return money
Earlier, Glenn Arcaro pleaded guilty to participating in a fraudulent scheme that lured more than $2 billion from investors in cryptocurrencies. The court ordered him to pay investors $24 million, which he earned from fraud.
Arcaro admitted that he colluded with other participants to deceive investors, using their interest in cryptocurrencies. The scammers sold them proprietary BitConnect tokens and promoted exchange trading with digital assets as a profitable investment.
At the same time, the U.S. Securities and Exchange Commission (SEC) filed a civil lawsuit against BitConnect, its founder Satish Kumbhani, Arcaro and its affiliated company. The SEC is seeking to return money to investors with interest and civil penalties against the defendants.
Q3 Trading Club
Recall that previously, Michael Ackerman, who headed the company Q3 Trading Club, admitted to fraud with cryptocurrencies in the amount of $30 million.
According to the indictment, since 2017, Ackerman has attracted funds to his trading company. He claimed that the algorithm he developed would bring investors 15% of the monthly profit. Ackerman forged documents provided to investors, claiming that his fund managed $315 million in cryptocurrencies. Whereas in fact there was never more than $5 million in the Q3 trading account.
The organizer of the scheme spent the funds raised on travel, the purchase of jewelry, vehicles and other luxury items. Now Michael Ackerman has pleaded guilty and agreed to return more than $36 million to investors. To do this, he will sell his assets purchased with the money of depositors.