US Department of Justice to sell crypto for $ 56M to compensate BitConnect victims

US Department of Justice to sell crypto for $ 56M to compensate BitConnect victims

US Department of Justice to sell crypto for $ 56M to compensate BitConnect victims By Daily EditorBitcoin

US authorities sell $ 56 million worth of cryptocurrencies to compensate victims of the scam BitConnect.

The United States Department of Justice, DOJ, plans to sell $ 56 million in cryptocurrencies seized following the scam of BitConnect.

In a press release, the department confirmed that the proceeds from the sale they would be the first part of compensation to victims of the fraud scheme that saw investors in the US and they lost more than $ 2 billion worth of Bitcoin globally. As we can see, this first sale amount is negligible in relation to the total loss.

Authorization to sell

The Justice Department noted that the cryptocurrency liquidation follows the largest single recovery from cryptocurrency fraud by the United States to date. In particular, a federal judge authorized the Department of Justice and the United States Attorney’s Office for the Southern District of California to sell the seized cryptocurrency.

“With the entry of the court’s interlocutory sale order, the government will begin the process of trying to compensate the victims of the BitConnect scheme by selling the cryptocurrency and withholding the proceeds in US dollars. The government will retain custody of seized earnings in cryptocurrency portfolios and intends to use these funds to provide restitution to victims pursuant to a future restitution order by the court in sentencing ”, the DOJ said.

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The crypto to be sold was confiscated from the developer of BitConnect, Glenn Arcaro, who has since pleaded guilty to his role in the case. Assets were recovered from Arcaro’s 20 portfolios, which also earned more than $ 24 million in commissions and other payments.

Following his guilty plea in September, Arcaro is scheduled to be sentenced on January 7, 2022, and faces a maximum of 10 years in prison.

More about the scam

The scam occurred at the height of the bull run for Bitcoin in 2017. Victims were scammed after the company claimed to offer investors returns of up to 40% per month. The investment allegedly played a role in the generation of the supposed volatility software trading robot of BitConnect.

In September, the US Securities and Exchange Commission, SEC, sued the founders of BitConnect stating that the company was an unincorporated organization that registered four companies in the UK. Currently, the companies are extinct or dissolved.

Sources: Justice Department and Finbold

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