Crypto promoter pleads guilty to fraud charges for his role in a $2B Ponzi scheme
The BitConnect scheme, described as a “textbook Ponzi scheme,” defrauded over $2 billion from investors globally.
Fri, 03 Sep 2021, 11:18 am UTC
Glenn Arcaro, a former director and promoter of the crypto exchange and lending platform BitConnect, pleaded guilty to fraud charges for his role in what is believed to be the largest crypto fraud ever charged criminally. The BitConnect scheme, described as a “textbook Ponzi scheme,” defrauded over $2 billion from investors globally.
“Arcaro and his confidantes preyed on investor interest in cryptocurrency,” Acting U.S. Attorney Randy S. Grossman said, according to a press release posted on the Justice Department website. “As a result, a staggering number of individuals lost an enormous amount of money. The Department of Justice will continue to protect the investing public and scrutinize the burgeoning cryptocurrency industry.”
Arcaro admitted that he conspired with others to exploit investors by fraudulently marketing BitConnect’s proprietary coin offering as a highly profitable investment, according to documents submitted to U.S. Magistrate Judge Mitchell D. Dembin.
He also admitted that he, along with others, misled investors about the “BitConnect Trading Bot” and “Volatility Software” by presenting them as being able to generate substantial profits with guaranteed returns. “BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors,” the press release said.
Arcaro and other promotors used social media to persuade investors by making materially false and misleading statements. He and a network of promoters in North America also formed a pyramid scheme called BitConnect Referral Program.
Arcaro earned as much as 15 percent for every investment into the BitConnect Lending Program, another part of the scheme. He admitted having earned around $24 million from the overall scheme.
“Arcaro has accepted responsibility for his actions of defrauding thousands of individuals worldwide to invest in BitConnect,” FBI Cleveland Field Office Special Agent in Charge Eric Smith said. “He lined his pockets with millions of dollars, money from victims that believed their funds were being invested into a new cryptocurrency with a high rate of return.”
<Copyright © TokenPost. All Rights Reserved. >