The US Justice Dept. decides to sell off almost $57M in seized cryptocurrency on Tuesday. Federal prosecutors in San Diego informed the media that it should repay multiple victimized investors.
The digital currencies were seized as a part of the massive Ponzi Scheme case against a person. In fact, the person of interest took part in promoting an offshore crypto lending program called BitConnect. Certain investors to get busted in the scam may receive some payback from the prosecution.
Crypto scams are increasing alarmingly with the continuous acceptance of cryptos. But it’s difficult to ensure repayment or recovery following a wiping out fraud.
That’s where the feds’ decision regarding the $57M crypto stands different from all aspects.
As per US Attorney’s Office, crypto liquidation is the largest single-phase recovery for victims to date. However, the BitConnect scam goes much larger, wiping out more than $2.0B from the market.
The case is indeed the largest crypto fraud to face criminal charges – says the US Attorney’s Office.
Glenn Arcaro from Los Angeles pleaded guilty to the BitConnect fraud charges early in 2021. Prosecution held him as one of the top BitConnect promoters in the USA.
He is believed to mislead potential investors through BitConnect proprietary technology. Arcaro admitted to gaining at least $24 million through the fraud – as per the plea agreement. His claim to turn the investment money into huge returns ended up making crypto scam headlines.
BitConnect Trading Bot, as well as Volatility Software, were directly used to perform the alleged scams.
However, BitConnect actually operates as a Ponzi Scheme to make the virtual trading. It directly uses one or more new investment funds to provide returns for others.
A judge already ordered the process of liquidating Arcaro’s seized cryptocurrency to begin. Prosecution confirmed the involvement of multiple top currencies for the repay. It counts Bitcoin, Ethereum, Dash, Litecoin with several others alongside some USD.
US Attorney’s Office published a guideline to support the defrauded victims. It implies the investors learn their rights to submit a victim impact statement to the office.