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HomeBitcoin NewsPromoter of Crypto Fraud Scheme Forced to Part with $17 Million

Promoter of Crypto Fraud Scheme Forced to Part with $17 Million

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A federal judge in the region of San Diego, California has ordered the leader of a crypto fraud scheme to pay as much as $17 million in restitution fees to more than 800 traders and investors that allegedly fell victim to his methods.

Fraud Promoter Will Also Spend Time in Prison

The scam was known as Bit Connect, and it will likely go down as one of the biggest crypto-based Ponzi schemes in history. Many investors who put their money into the platform were ultimately “paid back” with the funds of new investors to make it seem like they were getting returns. What was going on was one party was benefiting off the funds of the newer players.

At the center of the Bit Connect fraud is Glenn Arcaro, a 45-year-old promoter who served as the primary spokesman for the platform in the United States. Not long ago, Arcaro pleaded guilty to federal charges and will now serve three years in prison.

Aside from spending the next 36 months in an eight-by-nine cell, Arcaro must also part with $17 million of his own funds and give them to the very people he victimized. It is believed that traders from as many as 40 countries were harmed by Bit Connect.

The primary founder of the platform – Satish Kumbhani – remains at large. U.S. attorney Randy Grossman – who was tasked with overseeing the case against Arcaro and Bit Connect – mentioned in a recent statement:

Hundreds suffered devastating financial losses as a result of this terrible deception, and we hope today’s ruling will provide some relief to the victims.

Crypto fraud has proven to be one of the biggest problems facing the industry as of late. Not long ago, we published an article talking about how the fraud figures in 2022 outdid all those set in previous years. It was reported that as many as $20 billion in digital currency funds were stolen from exchanges or garnered through scams over the previous 12 months.

While things like romance scams remain prevalent and problematic within the confines of the crypto arena, perhaps the biggest (and most recent) example of fraud arrived in the form of FTX, the once prominent crypto exchange run by now disgraced executive Sam Bankman-Fried.

SBF Really Took Things to a Whole New Level

Long considered the golden boy of the crypto arena, SBF was arrested in December of 2022 by Bahamian police and extradited back to the United States. He is presently awaiting trial while living at his parents’ California home.

It is alleged that SBF spent users’ funds on luxury Bahamian real estate. It is also believed he used this money to pay off loans taken on by his other company Alameda Research. SBF has presently entered a not guilty plea, meaning his case will be taken before a federal jury.

Nick Marinoff
Nick Marinoffhttps://www.livebitcoinnews.com/
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and Benzinga.com, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.

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