Bitconnect scam victims set to receive compensation

Bitconnect scam

TL; DR Breakdown

  • Bitconnect scam victims will receive compensation from seized assets
  • The Justice Department wants to sell the seized $56 million worth of assets
  • United States regulators clamp down on illicit activities

Although most traders in the finance scene are entering the crypto scene, others are still skeptical due to some known issues. Besides the usual illicit activities perpetrated by hackers and scammers, most traders are afraid of falling for scams on an exchange. With this, the Department of Justice of the United States has announced that it will send out $56 million worth of digital assets taken from the Bitconnect scam. According to the statement, the body seized the said assets from the lead promoter of the Ponzi scheme exchange, given to the Bitconnect scam victims.

Justice Department will sell $56 million seized assets from the Bitconnect scam

In the announcement, the Justice Department mentioned that it would put the digital assets on sale and hold the balance in the native currency of the country. With this, the department will send out rewards to the Bitconnect scam victims ahead of a court sentencing. The said digital asset was taken from the lead promoter, Glenn Arco, who pleaded guilty at a court hearing.

Arco mentioned that he was one of the top promoters in the scam, which saw the exchange swindle users of about $2 billion in total. Meanwhile, Arco is set to undergo sentencing of up to 20 years at a court hearing billed for January 2022. To claim their monies, the Justice Department has urged victims to head to their official website to check out the steps to go about it.

US Regulators clamp down on Ponzi exchanges

The Bitconnect scam is one of the biggest scams in the crypto market. The platform entered the market, promising traders huge returns if they trade using the exchanges trading bot. At the period, there was no bot as the platform’s rewards were based purely on the number of downlines a user has on the platform. With the Ponzi scheme bringing traders’ attention to the platform, the native token of the exchange, BCC saw a massive increase in its market cap, hitting close to $400 at the time.

Internal investigations by regulatory bodies in Texas and North Carolina, the exchange folded up. After its collapse, the native asset saw a huge bearish run to trade below $30. The United States SEC slammed charges on 12 members of the exchange at the period, which saw them play a cumulative fine of $12 million. In another separate suit, the United States SEC launched an action against the founders of the exchange.

This is not the first time the Department of Justice will be carrying out such a sale as a previous Silk Road scam saw them seize and sell 30,000 Bitcoin. The digital assets were eventually bought by Tim Draper, who now holds $1.8 million of the asset. Another sale of 4,000 Bitcoin took place in 2020, worth $37 million at the time. With the Justice Department looking to sell the Bitconnect scam assets, it is only a matter of time before someone snaps it up.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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