SAN DIEGO (AP) — A Los Angeles man pleaded guilty Wednesday to participating in what prosecutors called a “textbook Ponzi scheme” that defrauded cryptocurrency investors worldwide of more than $2 billion.
Prosecutors said Glenn Arcaro, 44, sat atop the North American branch of the pyramid investment scheme BitConnect, the San Diego Union-Tribune reported.
Arcaro, who pleaded guilty in U.S. District Court to conspiracy to commit wire fraud, admitted in his plea agreement to earning “no less than $24 million from the BitConnect fraud conspiracy," the newspaper said.
As part of his plea, Arcaro must pay back that money to investors. He faces up to 20 years in prison when he is sentenced Nov. 15.
“The BitConnect scheme is believed to be the largest cryptocurrency fraud ever charged criminally,” the U.S. Attorney’s Office said in a statement.
Arcaro’s plea came the same day that the U.S. Securities and Exchange Commission filed a civil complaint against BitConnect, the Union-Tribune said.
According to prosecutors, Arcaro and his co-conspirators claimed that BitConnect used a proprietary technology that was able to generate huge profits by using investors’ money to trade on the volatility of cryptocurrency exchange markets.
“In truth, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors,” prosecutors said.