Indian Authorities Seize $190M in BitConnect Fraud Case

Indian authorities have seized a Lexus car, cash, and cryptocurrency worth approximately 16.5 billion rupees ($190 million) as part of an ongoing investigation into the collapse of the BitConnect cryptocurrency scam.

The Rise and Fall of BitConnect

BitConnect, established by Satish Kumbhani, promised investors a 10% return on their investments, attracting billions of dollars. 

However, the platform collapsed in 2018, exposing it as a Ponzi scheme. 2023, a California judge ordered $17 million in restitution for victims.

According to reports, from November 2016 to January 2018, the accused collected money from investors worldwide, including in India.

Notably, Kumbhani was charged in the U.S. and is also wanted in India. However, after he was charged by the U.S. Department of Justice in 2022, he remained a fugitive until Indian authorities recently traced him to Ahmedabad.

Fraudulent Claims and Financial Misuse

Notably, before the collapse of Bitconnect, the coin saw an increase of $463.31. It then reached a $3.4 billion market capitalization, resulting in significant losses for investors

On Saturday, India’s Directorate of Enforcement (ED) confirmed that BitConnect’s investment claims were fraudulent. The agency stated that the company misled investors by falsely claiming that funds were being used for trading through its so-called “Trading Bot.” 

Meanwhile, the money was siphoned off for personal enrichment, with funds secretly transferred to digital wallets controlled by Kumbhani and his associates.

Fraudsters Tracked Through Cryptocurrency Wallets

Likewise, to hide their identities, Kumbhani and his associates used a complex web of cryptocurrency wallets and transactions. However, through meticulous web tracking and intelligence gathering, the ED was able to trace these wallets and pinpoint the locations of digital devices storing the stolen funds.

“By tracking numerous web wallets and gathering ground intelligence, ED was able to zero in on the wallets and the premises where the digital devices containing said cryptocurrencies were available,” the agency stated.

Meanwhile, in 2024, reports indicate that India’s Enforcement Directorate arrested Shailesh Bhatt for his involvement in the BitConnect crypto extortion scheme. Bhatt faces money laundering charges and defrauding individuals of assets worth around $145 million, including 2,091 Bitcoin (BTC), 11,000 Litecoin (LTC), and cash.