• The US Department of Justice recently announced that victims of the $2.4 billion BitConnect Ponzi scheme will receive $17 million in restitution.
• The restitution will be distributed to nearly 800 victims from over 40 different countries.
• The court found that BitConnect operated a “textbook Ponzi scheme” by paying earlier investors with money from later investors.
Victims of the BitConnect Ponzi scheme may finally get some reprieve as the US Department of Justice recently announced that they will receive $17 million in restitution. BitConnect was a cryptocurrency lending and exchange platform which defrauded thousands of investors across the world. It was ordered by the United States District Court for the Southern District of California to distribute the restitution to nearly 800 victims from over 40 different countries due to their investment losses in the scheme.
The court found that BitConnect was operated as a “textbook Ponzi scheme” by its founders, who used money from new investors to pay out returns to earlier investors. The fraud was perpetrated by the platform’s founders, in particular Italian national John Anthony Caparco, who was found guilty of one count of conspiracy to commit wire fraud and one count of conspiracy to offer unregistered securities.
The court’s ruling also ordered that Caparco and his co-conspirators should pay a total of $4.2 million in disgorgement and a civil penalty of $1.8 million. The ruling further states that the restitution should be distributed to victims “in proportion to the net pecuniary losses they suffered as a result of the Defendants’ fraudulent conduct”.
The court also found that the defendants had employed a number of deceptive tactics to conceal the fraud and mislead potential investors. These tactics included false claims about the platform’s purported investments and profits, as well as the false promise of guaranteed returns on investments.
The court’s ruling is a welcome relief for the thousands of victims of the BitConnect fraud. The ruling serves as a reminder of the importance of researching and understanding the investments one is making before investing in any cryptocurrency platform. It also serves as a reminder that the cryptocurrency market is still largely unregulated and investors should be extremely careful when investing in any cryptocurrency platform.