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Sujha Sundararajan
Author
Sujha Sundararajan
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The Indian Enforcement Directorate of the city of Ahmedabad has seized $190 million worth cryptos tied to BitConnect Ponzi scheme. This marks one of the largest crypto seizures in the country so far.
The Directorate investigated the case from Feb. 11 to 15, confiscating digital assets, $15,570 in cash, a Lexus SUV vehicle and several electronic devises, the official statement read.
The probe was carried out under the Prevention of Money-Laundering Act (PMLA), 2002. It was based on First Information Reports (FIRs) registered by the Crime Investigation Department (CID) in Surat, the release read.
“During the period from November, 2016 to January 2018, the accused persons conducted a fraudulent and unregistered offering and sale of securities in the form of investments in Bitconnect’s purported ‘Lending Program,’ from investors worldwide, including from investors located in India,” the investigations revealed.
BitConnect Exposed as Ponzi Scheme
BitConnect collapsed in 2018 after the firm faced increased pressure from financial regulators, who issued cease and desist orders.
In 2022, Glenn Arcaro, the platform’s top U.S. promoter, was sentenced to 38 months in prison in addition to $17 million in restitution to victims worldwide.
According to the Directorate, BitConnect founder Satish Kumbhani used a “volatility software trading bot” to generate 40% returns per month. It also posted fictitious returns on the website amounting to 1% per day, or approximately 3,700% on an annualized basis.
The agency called the claims “sham,” and the company did not deploy investor funds for trading with its Trading Bot. “Rather, they siphoned investors’ funds off for their own benefit, and their associates’ benefit, by transferring those funds to digital wallet addresses controlled by them.”
Transactions Carried Through Dark Web
The investigations revealed that BitConnect involved “complex web of transactions,” most of which were carried out through Dark Web.
The company masked the transactions carried in numerous crypto wallets, the Directorate noted.
The agency tracked numerous wallets during the probe to find the premises where the digital devices containing cryptos were held.
Notably, several foreign nationals also invested in BitConnect. The Indian Enforcement Directorate is investigating the main accused of the case in the US, the report added.
