Crypto fraud scheme: $57 million in seized cryptocurrency to be sold to repay investors

Local

SAN DIEGO (CNS) – Around $57 million in cryptocurrency seized through the prosecution of a man who participated in a large-scale investment scheme will be sold to repay investors victimized by the fraud, federal prosecutors in San Diego said Tuesday.

The liquidation, which the U.S. Attorney’s Office called “the largest single recovery of cryptocurrency for victims to date,” stems from the investment scheme BitConnect, which prosecutors say defrauded investors out of more than $2 billion.

The U.S. Attorney’s Office said it is believed to be the largest cryptocurrency fraud ever criminally charged.

Glenn Arcaro of Los Angeles, 44, pleaded guilty to federal charges earlier this year for his role in misleading investors by claiming BitConnect used proprietary technology — known as the “BitConnect Trading Bot” and “Volatility Software” — to turn investors’ money into huge returns.

Prosecutors say BitConnect actually operated like a Ponzi scheme, which used investor funds to repay other BitConnect investors.

Arcaro, who officials say was BitConnect’s top promoter in the United States, admitted to earning at least $24 million through the scheme, according to his plea agreement. His plea included an agreement to repay the defrauded investors, and a judge last week ordered the liquidation of Arcaro’s fraud proceeds to begin the process. Prosecutors say the proceeds are largely in the form of cryptocurrencies, including “Bitcoin, Ethereum, Litecoin, Dash, and several others.”

The U.S. Attorney’s Office said victims of the scheme can learn about their rights and submit a victim impact statement for Arcaro’s sentencing hearing by visiting www.justice.gov/usao-sdca/us-v-glenn-arcaro-21cr02542-twr.

Arcaro is set to be sentenced Jan. 7 in San Diego federal court.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most Popular Stories

Latest News

More News