On Friday, the U.S. Department of Justice (DOJ) said that a Los Angeles man had been given “38 months in prison for his participation in Bitconnect.” Justice Department officials called Bitconnect a “massive fraudulent cryptocurrency investment scheme.”
Typical Ponzi Scheme
According to court records, 44-year-old Glenn Arcaro plotted with others to take advantage of investors’ enthusiasm for cryptocurrencies by falsely advertising Bitconnect’s initial coin offering and digital currency exchange as a profitable venture.
According to the Justice Department,
“The Bitconnect Ponzi scheme ensnared 4,154 victims from 95 countries making it a true worldwide Ponzi scheme.”
The DOJ claims that Arcaro laundered his Bitconnect scam profits via offshore accounts, purchased precious metal storage with part of the rest, and acquired several passports from other countries. According to the Justice Department, he planned to conceal his Bitconnect earnings from the IRS so that he wouldn’t have to pay taxes on them.
The DOJ further detailed:
“Arcaro admitted that he earned no less than $24 million from the Bitconnect scheme, all of which, according to court documents, will now be repaid to investors in restitution or forfeited to the government.”
Bitconnect’s market valuation reportedly peaked at $3.4 billion at its height, as reported by U.S authorities. They claim that the founder and his accomplices stole around $2.4 billion from investors. Bitconnect’s creator was previously charged in the United States in February, but Indian authorities recently opened an inquiry and booked him.
The crypto market is slightly reviving after the recent downturn and Bitcoin is now trading at $19,381 as per data from CMC.