U.S. court orders restitution for crypto Ponzi victims

A U.S. court has ordered that victims of a global crypto Ponzi scheme should share the US$17 million that has been recovered so far.

In 2021, U.S. authorities first charged a U.S.-based promoter of a  global crypto investment scheme, BitConnect, which is alleged to have taken more than US$2 billion from investors around the world.

The promoter, Glenn Arcaro, 44, ultimately pled guilty to conspiracy to commit wire fraud.

Separately, last year U.S. authorities also indicted the scheme’s alleged mastermind, Satish Kumbhani, for his role in the fraud. Those allegations have not been proven.

Now, in connection with the case against Arcaro, a federal district court ordered today that US$17 million in restitution should be distributed to approximately 800 victims in over 40 countries.

The scheme, which promised investors guaranteed returns from trading crypto, was actually “a textbook Ponzi scheme,” the U.S. Department of Justice (DoJ) said, with early investors receiving returns that came from the money contributed by later investors.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.