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BitConnect victims will be compensated with the sale of seized cryptocurrencies

Authorities in the United States received permission from a district judge to liquidate some USD 56 million in cryptocurrencies seized from the main promoter of BitConnect, a digital currency investment and lending platform classified as a scam in various parts of the world.

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

This is the money seized from the main promoter 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 if the figure to be sold represents the total money in Arcaro’s hands, nor does it identify the type of cryptocurrencies.

The USD 56 million withheld will be used for compensate for the losses of the victims of the fraudulent scheme , says 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 A sentence of up to 20 years in prison, last September he pleaded guilty to 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 find out about their rights , identify yourself as a victim and file a statement.

USA 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 body has been auctioning seized bitcoins since 2014.

The US Marshal Bitcoin Auction website, which tracks the volume of bitcoins auctioned, reveals that as of July this year about 185,230 BTC had been seized and sold, which is equivalent to to more than USD 10,770 million at the current exchange rate.

The United States Department of Justice has been auctioning cryptocurrencies
seized since 2014. Source: US Marshal Bitcoin Auction.

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 loan platform with the same name.

They operated for two years as an investment plan and created a network of sellers that offered huge returns based on their own bot of trading, managing to raise more than USD 2,000 million.

The reality was that the bot did not exist, since the project worked as a schematic a Ponzi 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 CriptoNoticias reported. The accusations were repeated in various countries , including the United Kingdom, Singapore, India and Australia, where the scheme has been banned and arrests have occurred.

Following closure, several class action lawsuits were filed. One of them was initially made in the United States, where the victims requested the reimbursement of some USD 770,000.

Although the previous lawsuit, in particular, was dismissed two years later by a state district judge Florida, dozens of other lawsuits against the company arose at the same time in various US states and in various parts of the world. The FBI even created a program to find victims of BitConnect.

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 unregistered securities.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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