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BitConnect’s Top US Promoter Pleads Guilty to Fraud Charge

Glenn Arcaro faces up to 20 years in prison for his role in the alleged $2 billion Ponzi scheme.

Sep 2, 2021 at 4:08 p.m. UTC
Updated Sep 2, 2021 at 4:45 p.m. UTC

Glenn Arcaro, BitConnect’s lead promoter in the U.S., pleaded guilty to conspiracy to commit wire fraud in a Los Angeles court yesterday.

BitConnect, a cryptocurrency lending program that operated from 2016 to 2018, shut down after the company received cease-and-desist letters from Texas state regulators alleging securities law violations. Thousands of investors were later allegedly defrauded of an estimated $2 billion.

According to a press statement from the U.S. Department of Justice, the 44-year-old California man “sat atop a large network of promoters in North America, forming a pyramid scheme known as the BitConnect Referral Program.”

Arcaro earned approximately 15% of every investment in BitConnect’s “Lending Program,” which he advertised on social media, as well as funds directly taken from BitConnect’s “concealed ‘slush’ fund.”

Arcaro admitted he earned $24 million from his role as a BitConnect promoter.

He faces up to 20 years in prison as well as monetary penalties.

Arcaro also faces a civil suit from the U.S. Securities and Exchange Commission (SEC), which brought charges on Sept. 1, also alleging fraud. The SEC has also sued BitConnect itself, and its founder Satish Kumbhani.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy.

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