BitConnect Ponzi Victims to Receive $17 Million Restitution

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Victims of the infamous BitConnect Ponzi scheme in 2017 are due to receive net restitution worth $17 million, according to a statement from the Department of Justice (DOJ) on Thursday. 

  • According to the DOJ’s statement, a federal district judge in San Diego ordered that the funds be distributed to 800 victims of the scam across 40 countries. 
  • The department described BitConnect as “a textbook Ponzi scheme” that paid earlier investors with money from newer investors. 
  • BitConnect’s top promoter Glenn Arcaro pled guilty to wire fraud conspiracy in September 2021. He was sentenced to prison for over 3 years in 2022.
  • Shortly afterward in February 2022, BitConnect’s founder Satish Kumbani was indicted for his role in the fraud.
  • “Arcaro and his co-conspirators ensured that up to 15% of the money invested into BitConnect went directly into a slush fund to be used for the benefit of its owner and promoters,” read the statement.
  • BitConnect launched in 2016, but reached a peak market capitalization of $2.4 billion before collapsing. Investors in BitConnect were promised a 1% daily yield on their Bitcoin. 
  • By contrast, Securities and Exchange Commission chairman Gary Gensler has warned against using any platforms offering a yield that’s anything over 7% per year. 

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