BitConnect: US court enters judgment vs Future Money’s Glenn Arcaro

Getting your Trinity Audio player ready...

The U.S. securities regulator has obtained a judgment against the lead promoter of the $2 billion digital currency lending scam BitConnect. Glenn Arcaro had made millions from promoting the scam, mainly in the U.S., and previously pleaded guilty to charges of conspiracy to commit wire fraud.

Unable to track down the founder of the massive scam, Satish Kumbhani, U.S. authorities have focused their efforts on the promoters, affiliates, and mid-level executives. The U.S. Securities and Exchange Commission (SEC) has set its sights on Arcaro, charging him in September with using his Hong Kong-incorporated company Future Money to conduct extensive marketing and promotional activities for BitConnect.

The watchdog has now revealed that the Southern District of New York has entered judgments against Arcaro and his company Future Money. The judgment comes after Arcaro pleaded guilty to conspiracy to commit wire fraud before the Southern District of California court.

In its press release, the SEC noted that Arcaro’s BitConnect-related promotional activities spanned August 2017 to January 2018. He was responsible for promoting BitConnect’s purported lending program to retail investors in the United States. He would also receive communication from the higher-ups at the project and relay it to the regional promoters who worked below him.

The SEC accuses Arcaro of violating the registration provision of the Securities Act and the anti-fraud provisions of the Securities Exchange Act.

Arcaro and Future Money both consented to the entry of judgments, and as a result, they are permanently enjoined from violating the charged provisions. They are also enjoined from offering or participating in some undisclosed sales programs or participating in a digital asset securities offering, either directly or indirectly.

Apart from that, they will also have to pay a civil penalty, disgorgement and prejudgment interest in an amount to be determined by the court at a later date.

BitConnect launched in 2016 and rose to become of the industry’s biggest projects. It’s said to have collapsed with 325,000 BTC worth of investors’ funds, worth $2 billion at the time but currently worth over $16 billion. Its founder’s whereabouts are still unknown, but just like Arcaro, other promoters have faced justice in the past few years.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple, Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.