Lawsuits filed within the US final week towards BitConnect’s promoters and executives have been launched to the general public. The identities of the people behind the alleged Ponzi scheme together with director Glenn Arcaro had been revealed, and a number of other plaintiffs have claimed that the founders of OneCoin, one other large-scale Ponzi scheme, had been concerned with BitConnect.
Several lawsuits filed earlier this month steered that Glen Arcaro virtually ran the Ponzi scheme as its director of US promotions, overseeing a number of promoters together with Craig Grant and Travon James. The lawsuits accused BitConnect of working a Ponzi scheme utilizing cryptocurrency as a canopy. It promised buyers a hard and fast revenue from their funding, which was by no means shared with the buyers.
The total group was structured to profit early buyers by scamming customers who joined the group at a later stage. As the BitConnect Ponzi scheme imploded, the worth of the BitConnect coin (BCC) plunged to almost zero, and folks’s life financial savings and investments had been misplaced in a single day.
“BitConnect uses cryptocurrency as a cover for running its Ponzi scheme. For example: a. It provides daily interest on an investment that has no income other than new investor money; b. It artificially increases the value of its cryptocurrency by having new investors in the Ponzi scheme purchase BCC before investing; c. It hides the identity of the owners of this scam by using an offshore company created through a company called Companies Made Simple,” the lawsuit reads.
David Mehmet, a plaintiff in one of many circumstances towards BitConnect, claimed that three executives and founders of Onecoin, a Ponzi scheme that was investigated by the Indian, Italian, German, and Bulgarian authorities earlier this yr, are related to BitConnect. Mehmet claimed that Nigel Allen, the founding father of OneCoin, XECoin, Crypto888, and Octacoin, together with two OneCoin founders, Ruja Ignatova and Sebastian Greenwood, oversaw the BitConnect Ponzi scheme as high executives.
In January of this yr, the Prosecutor’s Office of Bulgaria revealed that the federal government raided the places of work of OneCoin and seized its servers. Although OneCoin relies in Dubai, the Bulgarian authorities famous that the group features by way of “hundreds of affiliated companies on 4 continents […] [which] are being investigated in England, Ireland, Italy, the United States, Canada, Ukraine, Lithuania, Latvia, Estonia and many other countries.”
Prior to her arrest, Ignatova claimed that OneCoin was not a Ponzi scheme and that it was an academic platform for cryptocurrency buyers. Mehmet steered that BitConnect has equally began to assert to have operated as an academic platform for cryptocurrency buyers, not a lending website.
OneCoin nonetheless stays useful in lots of nations other than the choose few which have cracked down on the Ponzi scheme. BitConnect may proceed to function if authorities fail to establish all the identities behind the Ponzi.
At one level, BitConnect was valued at over a billion . As such, buyers have misplaced over a billion on this Ponzi scheme, which was fairly clearly a rip-off from the start given its mounted return fee. The failure to punish its operators may result in extra BitConnect-like Ponzis sooner or later.