DOJ to Sell $56M in Crypto Proceeds From BitConnect Fraud Scam

The agency called the liquidation the largest recovery of assets tied to a cryptocurrency fraud to date.

AccessTimeIconNov 16, 2021 at 6:33 p.m. UTC
Updated May 11, 2023 at 4:42 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A U.S. federal judge is allowing the U.S. Department of Justice (DOJ) to liquidate approximately $56 million in proceeds seized from Glenn Arcaro, the lead promoter of BitConnect, a crypto lending program that defrauded thousands of investors out of an estimated $2 billion.

  • The DOJ said in an announcement Tuesday that the liquidation was the most sizable recovery of assets tied to a crypto fraud by the U.S. to date.
  • The agency said it would “begin the process” of selling the seized cryptocurrency and would hold the proceeds in U.S. dollars with the intent of providing restitution to the victims of the scheme.
  • In September, Arcaro pleaded guilty to conspiracy to commit wire fraud in what the DOJ called “the largest cryptocurrency fraud scheme ever charged criminally.”
  • The 44-year-old Arcaro “sat atop a large network of promoters in North America, forming a pyramid scheme known as the BitConnect Referral Program,” the DOJ said at the time of his guilty plea. He is scheduled for sentencing on Jan. 7, 2022, and faces a maximum 20-year prison sentence.
  • BitConnect, which operated from 2016 to 2018, shut down after the company received cease-and-desist letters from Texas state regulators alleging securities law violations.
  • The U.S. Securities and Exchange Commission (SEC) also filed charges earlier this year against BitConnect and its founder, Satish Kumbhani, as well as Arcaro.



Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

James Rubin

James Rubin was CoinDesk's U.S. news editor based on the West Coast.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.