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BitConnect Victims will Receive $17 Million: DOJ

Compensation will be distributed to 800 people worldwide.

According to a Jan. 12 announcement from the US Department of Justice (DOJ), BitConnect victims will receive $17 million in reparations.

According to the announcement, a federal court in San Diego, California has ordered that the monies be handed to 800 people in 40 nations.

BitConnect was widely recognised as a Ponzi fraud, both publicly and in court. Its associates have been accused and convicted on a variety of allegations: Satish Kumbhani, the founder of BitConnect, was indicted in February 2022, while lead US promoter Glenn Arcaro pled guilty in September 2021. In addition, the Securities and Exchange Commission of the United States sued both in September 2021.

Between 2016 and 2018, BitConnect was in operation. The related crypto token’s value plummeted quickly after the project was shut down.

Several authorities, notably the United Kingdom, Texas, and North Carolina, took early measures to restrict Bitconnect’s operations. However, due to the project’s scattered nature and lack of centralised leadership, several developments around the project continued even after it was legally shut down or became the target of regulators.

Because of the nature of the situation, victims have had to wait years for recompense. The DOJ seized $56 million in bitcoin in November 2021 with the goal of selling it and compensating victims. Due to market fluctuations, the $56 million in crypto money is now worth around $17 million, however the DOJ has not said when it sold the seized bitcoin for cash.

In any event, the $17 million due to be returned to victims represents only a portion of BitConnect’s total value, as it was confiscated from Arcaro personally. According to a DOJ statement in early 2022, BitConnect received $2.4 billion from investors.

 

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