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Cryptocurrency heist: $56 million worth of crypto seized will be sold to compensate victims

The US Justice department informed that the victims of the scam will soon get some restitution, after it sells $56 million worth of cryptocurrency it seized.

By: Tech Desk | Pune |
November 19, 2021 2:56:08 pm
This liquidation is the largest single recovery of a cryptocurrency fraud by the United States to date. (Image: File)

Cybercriminals are now taking advantage of the ongoing craze around cryptocurrencies to trick potential victims and steal their digital money. In what’s called one of the biggest heist in the cryptocurrency world, the US Justice Department announced that it seized $56 million worth of cryptocurrency— as part of its case against BitConnect scam, according to a press release.

The US Justice department informed that the victims will soon get some restitution. “The proceeds from the sale will be used to help pay back victims of the scam,” the US Justice Department stated.

BitConnect was a scam cryptocurrency. The founders duped thousands of people out of $2 billion worth of Bitcoin in 2017. The scheme is the largest cryptocurrency fraud ever criminally charged, the US Justice Department said in its statement.

“With entry of the court’s interlocutory sale order, the government will begin the process of seeking to make whole victims of the BitConnect scheme by selling the cryptocurrency and holding the proceeds in U.S. dollars. The government will maintain custody of the seized proceeds in cryptocurrency wallets and intends to use these funds to provide restitution to the victims pursuant to a future restitution order by the court at sentencing,” the US Department of Justice added.

The crypto to be sold was seized from BitConnect’s top promoter, 44-year-old Glenn Arcaro, who pleaded guilty in federal criminal court for his role to defraud BitConnect investors in the United States and abroad, in which investors were fraudulently induced to invest over $2 billion. Arcaro is scheduled to be sentenced on January 7, 2022, and faces a maximum penalty of 20 years in prison, the press release asserted.

Blockchain can help prevent fraud

This is not the first time that a massive crypto scam took place. Back in August, hackers pulled off the biggest ever cryptocurrency heist, stealing $613 million in digital coins from token-swapping platform Poly Network, only to return all the tokens. This was only possible because of the enhanced security delivered by Blockchain technology.

Blockchain technology creates a database of transactions with end-to-end encryption, to shut out fraud and unauthorized activities. In addition, all the data on the Blockchain is stored across a network of computers, which making it extremely difficult to hack.

Furthermore, every transaction recorded on Blockchain is immutable— meaning that it cannot be deleted or changed. Meanwhile, cyber researchers around the world have urged the crypto community to stay on high alert, as crypto scams become prevalent.

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