What only happened? The US Department of Justice has been given the greenish lite by a district approximate to begin liquidating approximately $56 million in cryptocurrency sized from the "number one promoter" of BitConnect, a failed cryptocurrency that was linked to a Ponzi scheme a few years back.

Back in September, 44-year-old Glenn Arcaro of Los Angeles pleaded guilty to participating in a conspiracy to defraud BitConnect investors. Arcaro said he and others knowingly mislead investors well-nigh BitConnect'south supposedly proprietary engineering science, which they claimed could generate substantial profits and guaranteed returns.

"In truth, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with coin from later investors," the Justice Department said.

Investors collectively dumped over $two billion into the scheme, making it the largest cryptocurrency fraud scheme ever charged criminally.

The government'southward goal with the liquidation is to make whole victims of the scheme through restitution. Those who lost money are invited to fill out a victim bear on statement to identify themselves as potential victims. The government will sell off the crypto and hold the proceeds in US dollars before distributing it to victims.

Information technology's unclear which cryptocurrency or cryptocurrencies the seized funds are in, but a good guess would be Bitcoin. The largest cryptocurrency by market cap is currently trading just due south of $58,000 after hitting an all-time high earlier this calendar month of almost $69,000.

Arcaro, meanwhile, is scheduled to be sentenced early next year and is facing a maximum of twenty years in prison for his function every bit the superlative promoter of BitConnect in the United states. Arcaro said he earned no less than $24 1000000 from BitConnect, all of which must exist paid back to investors.

Prototype credit Pixabay, Worldspectrum