The Indian State Police is looking for the creator of the cryptocurrency Ponzi scheme BitConnect. The founder of BitConnect, Satish Kumbhani, is now a topic of interest to many regulatory agencies. A local Indian source claims that Kumbhani is currently being looked into by the Federal Bureau of Investigation after being accused of running a $2.4 billion global Ponzi scheme in a US court.
After a Pune-based lawyer complained that he had lost around 220 Bitcoin (BTC), worth around $5.2 million, to the BitConnect fraud, Indian authorities got intrigued in Kumbhani’s case. As a result, Kumbhani and other individuals of interest became the subject of an investigation by the Pune police, which is a division of the Indian state Maharashtra Police. The complainant claims that his initial investment of 54 BTC generated returns of 166 BTC, which he then reportedly redeployed on the platform.
The FIR claims that BitConnect defrauded the claimant’s initial deposit and profits. Although a hunt for the accused has begun, no one has been taken into custody as of yet. Officials claim that a probe is still going on to see if the same individuals have taken advantage of more people.
The U.S. Attorney Randy Grossman for the Southern District of California stated on the matter:
“This indictment alleges a massive cryptocurrency scheme that defrauded investors of more than $2 billion. The U.S. Attorney’s Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud.”
SEC also eyes at BitConnect founder
BitConnect, which started in February 2016 as a platform and a digital currency, collapsed in January 2018, and the founders later disappeared with the investors’ funds. The United States Securities and Exchange Commission (SEC) has also been investigating the matter, but their search has been unsuccessful.
The need for cryptocurrency regulation has grown as a result of these scam incidents. As TheCoinRise reported recently, ten crypto exchanges are being seriously looked at by the Indian authorities for allegedly laundering more than 1 billion rupees ($12.5 million) in digital assets.