A court in Russia’s Tatarstan region has denied the appeal of the founder involved in the alleged $1.5 billion Bitcoin Ponzi scheme. According to Russian publication Inkazan, the Supreme Court of Tatarstan upheld the arrest in absentia of Marat Sabirov, the co-founder of Finiko, a company which the Bank of Russia put on its list […]
The post Court Denies Appeal of Founder Involved in Alleged $1,500,000,000 Bitcoin Ponzi Scheme appeared first on The Daily Hodl.
Tatarstan’s highest court has rejected appeals against arrest warrants issued for three co-founders of the notorious Finiko crypto pyramid. The top representatives of the Ponzi scheme, accused of large-scale fraud in Russia, are still hiding abroad, media reports reveal. Three Finiko Ponzi Scheme Members Still Wanted The Supreme Court of Tatarstan, a republic of the […]
Law enforcement in the Russian republic of Tatarstan have made new arrests in connection with the crypto Ponzi scheme Finiko. Two women detained this week are believed to have attracted millions of dollars to the pyramid. The now collapsed Finiko lured investors from a number of countries in the post-Soviet space and around the world, […]
A slew of late court filings by lawyers representing Mirror Trading International (MTI) investors has forced a South African judge to postpone the hearing of the liquidators’ application to have the online bitcoin scam declared an illegal business. Concern Over Implications of Declaration Order As a Mybroadband report explains, the investors’ belated decisions to oppose […]
A high-ranking representative of Russia’s notorious Finiko Ponzi scheme has been arrested in Tatarstan. Ilgiz Shakirov, a businessman from Kazan, rose to the rank of vice president of the crypto pyramid which is believed to have defrauded millions of investors in the Russian Federation and surrounding regions. Kazan Police Detain Finiko Vice President Police in […]
Of all funds sent to illicit cryptocurrency addresses from Eastern Europe, scams attract the greatest amount, according to a new report. In the past year alone, crypto addresses based in the region have sent the fraudulent schemes a staggering $815 million in crypto. Eastern Europe Leads by Volume of Illicit Crypto Transactions Among the world’s […]
Former BitConnect promoter Glenn Arcaro has pled guilty to his role in the saga, but the whereabouts of the firm’s founder Satish Kumbhani is unknown.
Former director and promoter of the notorious Bitconnect Ponzi scheme, Glenn Arcaro, has pled guilty to fraud charges related to his role in the now-defunct crypto exchange and lending platform
He has been ordered to pay back $24 million to investors.
In a parallel action in the long-running saga the United States Securities and Exchange Commission (SEC) has charged Bitconnect, its founder Satish Kumbhani, former director Arcaro, and Future Money Ltd. over the scheme. The defendants are accused of running a fraudulent, unregistered securities offering that netted $2 billion.
The latest developments come three years after BitConnect shut down its lending platform and crypto exchange in light of warnings from Texas and North Carolina regulators.
Bitconnect has been widely accused of being a Ponzi scheme, and the scheme lives on in countless memes.
According to a Sept.1 release from the Department of Justice (DoJ), Arcaro pled guilty to charges alleging conspiracy to commit wire fraud.
The Los Angeles resident admitted to conspiring with “others” to exploit investors by “fraudulently marketing” BitConnect’s coin offering and crypto trading platform as a highly profitable investment.
The 44-year-old also admitted to misleading investors about the “BitConnect Trading Bot” and “Volatility Software” as being able to generate large profits and guaranteed returns by using investor funds to trade on the volatility of crypto markets.
“In truth, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors,” the DoJ release read.
Arcaro is said to have operated a large network of promoters in North America that formed a pyramid scheme dubbed the “Bitconnect Referral Program.” He earned around 15% per investment into BitConnect’s lending program, while he also received a cut from all investments via a hidden “slush” fund.
The former promoter admitted to earning around $24 million from his fraudulent activities and has been ordered to pay back the full amount to investors.
“Arcaro capitalized on the emergence of cryptocurrency markets, enticing innocent investors worldwide to get in early by promising them guaranteed returns, and exploiting the internet and social media to reach a larger pool of victims with greater ease and speed,” said Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office.
Related: Crypto is too big to exist outside of public policies, warns SEC chair
The SEC charges announced today are aimed at BitConnect, founder Satish Kumbhani, former director Arcaro and Future Money Ltd — a firm incorporated by Arcaro in Hong Kong.
According to Sept. 1 complaint, the SEC alleges that the defendants conducted a fraudulent and unregistered securities offering via BitConnect’s lending platform between 2017 and 2018, that generated approximately 325,000 Bitcoin (BTC) worth $2 billion at the time.
Today, we announced that we have filed an action against an online crypto lending platform, its founder, and its top U.S. promoter and his affiliated company.
— SEC (@SECGov) September 1, 2021
They allegedly defrauded retail investors out of $2 billion!
More:https://t.co/gO10Ag0tfh pic.twitter.com/XghdUBqaCz
The complaint asserts that users were duped into investing in the lending platform via claims that BitConnect’s trading bot would produce guaranteed returns of 40% a month, and accused BitConnect of posting “fictitious returns” on the website equating to an average of 1% per day, or 3,700% annually.
“These claims were a sham. As Defendants knew or recklessly disregarded, BitConnect did not deploy investor funds for trading with its purported Trading Bot. Rather, BitConnect and Kumbhani siphoned investors’ funds off for their own benefit and their associates’ benefit."
The SEC notes that the whereabouts of BitConnect’s founder Kumbhani is currently unknown.
The SEC is seeking a full disgorgement of funds, the enjoinment of the defendants from violating securities laws in the future, and civil monetary penalties.
In May the SEC charged six other BitConnect promoters for their role in the alleged insecurities offering, and Cointelegraph reported on July 8 that the SEC had closed in on settlements with four of the six individuals.
In a last-ditch attempt to stall the sale of Mirror Trading International (MTI) assets, two masterminds of the collapsed bitcoin Ponzi scheme have warned investors that liquidating the investment company will likely result in them being asked to return all withdrawn bitcoins. Opposition to Attempts at Declaring MTI a Ponzi Scheme In a court filing […]
The Federal Bureau of Investigation is joining the investigation into one of the largest alleged crypto scams of 2020.
Investigations into the South African company Mirror Trading International (MTI) — widely seen as last year’s most ruinous Bitcoin (BTC) Ponzi scheme — are now engaging the United States Federal Bureau of Investigation.
MTI, which went into provisional liquidation in December 2020, claimed to have over 260,000 members across 170 countries at its height. It had first caught regulators’ attention in Texas back in July of last year, where its operations were quickly shut down. South Africa’s Financial Services Conduct Authority (FSCA) issued its own statement in August 2020, warning that the company lacked a mandatory license and was offering investors implausible, fantastical returns on their investment. The FSCA had advised MTI’s existing clients to request immediate refunds.
Since the scheme’s collapse, the liquidation team in South Africa has been attempting to trace MTI’s assets, with the company believed to have held around 23,000 BTC worth around $874 million at today’s price. The team has been seeking to expand powers to aid their efforts since January.
In an email to Bloomberg, five MTI trustees said they had now “had meetings with international law enforcement agencies like the Federal Bureau of Investigation, after being approached by them,” revealing that “the FBI is joining forces with the liquidators of Mirror Trading International in the interest of several U.S. and local investors.”
As previously reported, South African media outlets have leaked alleged internal MTI communication that suggests that the company’s senior executives were in the dark about the scheme’s operations, with MTI CEO Johann Steynberg the sole person to have had full control.
Related: South Africa learns a hard crypto lesson amid fast growing demand
In their correspondence with Bloomberg, the liquidators said that “although there is a paper trail (airplane ticket) regarding [Steynberg’s] possible flight attempt to Brazil, no video or photo confirmation could be obtained that he did leave the country.” Steynberg has remained AWOL since December 2020.
An executive at the South African crypto exchange Luno has this week revealed to reporters that some of the victims of a major alleged crypto theft in the country this spring, tied to the Africrypt investment scheme, had also previously sent their funds to MTI.
The Nigerian pop artist and celebrity, Davido, recently posted several tweets endorsing ‘rapdoge,’ the so-called “first deflationary meme token fully supported by celebrities & rappers.” In one of the tweets, Davido tells his 9.5 million followers to “buy $20, $100 or $1000 worth of rap doge tokens and be ready to make some money.” Pump […]
