Head of cryptocurrency exchange BitConnect accused of $ 2 billion bitcoin fraud

U.S. Department of Justice reported This week, Los Angeles resident former director of cryptocurrency platform BitConnect Glenn Arcaro pleaded guilty to conspiracy to commit electronic communications fraud. Together with the confiscation of funds obtained by criminal means, Arkaro faces a maximum sentence of 20 years in prison.

Arkaro colluded with others to leverage investor interest in cryptocurrency by offering proprietary BitConnect coins in exchange for guaranteed return bitcoins.

Arcaro also admitted that he and others agreed to mislead investors about the BitConnect software, which allegedly generated significant guaranteed profits by leveraging investor money and cryptocurrency volatility when trading on the exchange.

“In truth, BitConnect used the textbook Ponzi scheme to pay early BitConnect investors money from later investors.” – they say in the prosecutor’s office.

As a director, Arcaro received a share of every receipt of funds. From each transaction he received 15%, and in the end he earned more than $ 24 million. All this money, according to court documents, Arkaro must return to investors.

In June, the US Securities and Exchange Commission (SEC) indicted five alleged members of the BitConnect promoter pool. The regulator claims that in 2017 and 2018, five companies promoted and sold securities through the BitConnect lending program, which promised investors returns of up to 40%.

BitConnect and its founder, Satish Kumbhani, are also facing fraud charges. The US Department of Justice reported that investors in the US and abroad have lost more than $ 2 billion as a result of BitConnect’s activities, which are considered “The largest cryptocurrency scam ever charged with a criminal offense.”


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Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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