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| Cryptocurrency valued at $56 million seized |
The US government confiscated $56 million in cryptocurrency from participants in the BitConnect scam in order to sell these coins and use the proceeds to compensate victims.
The US Department of Justice said this was the biggest crypto rally to date and was voluntarily abandoned by Glenn Arcaro of Los Angeles, who claimed to be BitConnect's primary sponsor.
Arcaro will be found guilty on January 7, 2022 and faces up to 20 years in prison.
Bitconnect, or BCC, is an open source cryptocurrency associated with Bitconnect.co, a high-return investment scheme (Ponzi scheme).
After the platform administrators shut down the profitable platform on January 16, 2018, they redeemed the user's investment in BitConnect. Confidence lost and the token rose from its previous high of around $500 to less than $1.
According to the US Securities and Exchange Commission, BitConnect persuaded people to invest a total of $2 billion by telling people that it had a bot that could generate a very high return on crypto transactions.
In other words, BitConnect is promoting itself as a way for people to easily invest in cryptocurrencies and earn a lot of money in the process.
It appears when people hear a lot about encryption. But they don't know much about it (roughly between 2016 and the end of 2018).
The Department of Justice called it a fraud. BitConnect uses new investor funds to pay old investor fees.
Its proponents have created MLM programs where they can earn discounts by promising them the same offer to encourage others to invest.
Arcaro admitted involvement in two parts of the fraud in September. In addition to posting videos mocking BitConnect skeptics. He said he earned $24 million in revenue from attendees.
Plans to sell cryptocurrency to pay compensation to victims
Although BitConnect primarily conducts transactions through Bitcoin. The victim used Bitcoin to buy BitConnect's BCC tokens. You can apparently convert BCC back into Bitcoin via a complicated process.
The government plans to compensate the victims in US dollars. A press release from the Department of Justice said that law enforcement is helping the U.S. Postal Service convert cryptocurrency into legal tender.
After the court sentenced Akaru in January 2022, the government launched a website for victims seeking compensation.