Victims of BitConnect will be compensated with the sale of seized cryptocurrencies

Authorities in the United States received permission from a district judge to liquidate some $ 56 million in cryptocurrencies seized from the main developer of BitConnect, a digital currency investment and lending platform that has been described as a scam in various parts of the world.

According to release published this November 16 on the official website of the Department of Justice, the authorization allows that agency and the United States Attorney’s Office for the Southern District of California sell the cryptocurrencies and retain the dollar amount.

It’s about the money seized from main developer of BitConnect, Glenn Arcaro, whose holdings in cryptocurrencies are guarded in digital wallets that the US government has managed for a few months. The letter does not indicate whether the figure to be sold represents the total money in the hands of Arcaro, nor does it identify the type of cryptocurrencies.

The USD 56 million withheld will be used to compensate for the losses of the victims of the fraudulent scheme, notes the note. With this, it is expected to comply with the restitution order that will be issued by the court when it passes judgment on Arcaro, whose trial is scheduled for January 7, 2022.

Arcaro, who could receive a sentence of up to 20 years in prison, last September pleaded guilty of participating in a conspiracy to defraud thousands of BitConnect investors in various countries, who were scammed about $ 2 billion.

In its statement, the Department of Justice invites potential victims of the BitConnect plan to visit the justice.gov website to learn about your rights, identify yourself as a victim and file a statement.

The US has sold 185 thousand seized bitcoins

Although the publication does not clarify if the cryptocurrencies seized from Arcaro are bitcoins, the amount withheld and sold could be added to the list of crypto assets guarded by the United States Marshals Service (USMS), which is part of the Department of Justice.

This organism has been auctioning bitcoins seized since 2014.

The US Marshal Bitcoin Auction website, which track the volume of bitcoins auctioned, reveals that until July of this year they had seized and sold about 185,230 BTC, which is equivalent to more than USD 10.77 billion at the current exchange rate.

BitConnect and its demands in various parts of the world

BitConnect was a project launched in 2016 with a cryptocurrency that was traded through an exchange and lending platform with the same name.

They operated for two years as an investment scheme and created a network of sellers offering huge returns based on their own Bot of trading, achieving raise more than $ 2 billion.

The reality was that the bot did not exist, because the project it worked like a Ponzi scheme that rewarded some participants based on the number of people who entered.

In 2018 the site was shut down when securities regulators warned investors about the scam, as reported by CriptoNoticias. The accusations were repeated in various countriesincluding the United Kingdom, Singapore, India and Australia, where the scheme has been banned and arrests have been made.

After closing, various lawsuits were filed collective. One of them was initially made in the United States, where the victims requested the reimbursement of some USD 770,000.

Although the above lawsuit, in particular, was dismissed two years later by a Florida state district judge, other dozens of lawsuits against the company arose in parallel in various US states and in various parts of the world. Even the FBI came to create a program to find BitConnect victims.

Finally, in May of this year, the Securities and Exchange Commission (SEC) filed a lawsuit against five people who led the scheme, including Glenn Arcaro and Satish Kumbhani, the founder. All face charges for fraud and trading of unrecorded securities.