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BitConnect ordered to pay $17 Million to victims

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(AP Photo/Elise Amendola, File)

San Diego, CA —  A federal district court has ordered the cryptocurrency company BitConnect to pay out $17 million in restitution to the victims of their cryptocurrency investment scheme. 

The ruling came down on Thursday in San Diego.

According to documents, Bitconnect promoted its “Lending Program” stating that its program would generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets.  

Investigators found, however, that BitConnect was actually operating a Ponzi scheme by paying earlier BitConnect investors with money from later investors. 

The company also funneled 15% of the money invested into a slush fund that was used for the benefit of the owner and promoters.

Over 800 victims from over 40 different countries suffered financial losses due to the scheme. 

In Sept. 2021 the top U.S.-based promoter for the company, 44-year-old Glenn Arcaro pleaded guilty to conspiracy to commit wire fraud.

In Feb. 2022, BitConnect’s founder Satish Kumbhani, was indicted for his central role in the multibillion-dollar fraud. 

It is unclear when the money is expected to be paid out.