Settlement unlikely in BitConnect class-action
A BitConnect class-action Status Report reveals a settlement between the parties is
unlikely at this time based on the history of this litigation and the Parties’ litigation positions.
A Fourth Amended Complaint is also in the works.
Following an appeal reversal by the Eleventh Circuit back in February, here’s the current status of the case;
Plaintiffs intend to file a Fourth Amended Consolidated Class Action Complaint, as it appears there is presently no operative Complaint in this case.
Plaintiffs will include in that pleading the defendants who, according to the ruling of the Eleventh Circuit Court of Appeal, were improperly dismissed as defendants from this action.
Defendant Glenn Arcaro is among the Defendants to be reintroduced into the lawsuit in the amended pleading. Plaintiffs have been advised that Defendant Arcaro will seek dismissal and/or a stay of all claims against him.
Arcaro (right), BitConnect’s top executive in the US, pled guilty to BitConnect related criminal charges in September 2021.
Arcaro also settled related civil fraud charges with the SEC earlier this year.
Class-action Plaintiffs cite Arcaro’s regulatory legal cases as undermining his defense in the case.
Plaintiffs believe those arguments lack merit, serve no constructive purpose for narrowing any of the factual and legal issues in this case, and simply add unnecessary delay to these proceedings.
With “I didn’t do it” seemingly off the table, Arcaro lays out the basis for his yet to be filed motion for a dismissal.
Mr. Arcaro intends to file a motion to dismiss and/or an alternative motion to stay, based on the parallel criminal proceedings pending and Mr. Arcaro’s forfeiture of all money he obtained through the BitConnect program, with interest, to the federal government.
Over $56 million has been recovered from Arcaro through criminal and civil regulatory proceedings filed against him.
Specifically, while this case was on appeal, Mr. Arcaro forfeited approximately $57 million of cryptocurrency, which the government collected for the express purpose of reimbursing BitConnect’s investors, including the Plaintiffs.
The Private Litigation Securities Reform Act also provides for an automatic stay pending the resolution of any motion to dismiss.
Arcaro also appears to want a shot at the Supreme Court.
Mr. Arcaro may also seek to stay this case pending the resolution of his Petition for Writ of Certiorari.
This is the first I’d seen of Arcaro appealing the Eleventh Circuit’s decision to the Supreme Court.
I went and looked up the case and found Arcaro applied for an extension to file his writ of certiorari on June 22nd.
On June 28th Justice Thomas granted Arcaro’s application, giving him until September 19th to file.
A recent order in Arcaro’s criminal case rescheduled his sentencing to September 16th.
Mr. Arcaro believes that resolution of the threshold issues raised by the motions to dismiss and stay, and by his Petition for Writ of Certiorari, will simplify this case and resolve it or, at a minimum, narrow the issues to be tried.
BitConnect promoter Ryan Maasen is also a defendant in the case. He doesn’t oppose but likewise doesn’t seem to have participated in drafting of the Joint Status Report.
Defendant Ryan Maasen is unrepresented, but has provided his contact information and was copied on correspondence related to this Joint Status Report and Proposed Scheduling Order.
- Class-action Plaintiffs will file their Fourth Amended Complaint;
- Arcaro will file a motion to dismiss;
- Arcaro might attempt to challenge the Eleventh Circuit’s decision in the Supreme Court (I have a feeling this depends on his sentence); and
- failing a resolution to the case, both parties have requested a June 12th, 2023 trial date.
I’ll continue to monitor the case docket for updates.
Update 3rd August 2022 – The BitConnect class-action has been referred to mediation.
The July 18th order has also scheduled a tentative June 5th 2023 trial date.
Update 17th October 2022 – I’ve been following Arcaro’s SCOTUS docket and there’s been no updates since the June 28th extension filing.
I assume this means Arcaro missed the September 19th writ filing deadline and won’t be trying for a SCOTUS appeal.
I’m still tracking the BitConnect class-action docket but as of this update am no longer checking Arcaro’s SCOTUS appeal docket for updates.
Update 17th November 2022 – Seems to be a docket error but nonetheless, BehindMLM can confirm Arcaro’s SCOTUS writ petition has been denied.
Update 8th December 2022 – The BitConnect class-action was voluntarily dismissed by co-lead Plaintiffs on November 22nd.