The DOJ's filings indicate that the project's founders diverted the funds and began operating a "textbook Ponzi scheme by paying earlier Bitconnect investors with money from later investors."
Glenn Arcaro previously pleaded guilty to conspiracy to commit wire fraud for his role in BitConnect and had $56 million seized by the Justice Department.
The stash was seized from the “number one promoter” of the $2B BitConnect scam and is the largest single recovery of a digital currency fraud scheme ever.
The securities regulator has levied a new action against BitConnect founder Satish Kumbhani and the lead U.S. promoter after they allegedly defrauded 325,000 BTC from investors.
