Nearly $190M in Crypto Seized in BitConnect Scheme by Indian Authorities

Indian authorities have confiscated nearly $190 million in cryptocurrency linked to the Bitconnect Ponzi scheme, as part of a continuing investigation into the global fraud that collapsed in 2018.

A local reported stated:

“The Enforcement Directorate (ED), Ahmedabad, has seized cryptocurrency worth Rs 1,646 crore during its investigation into BitConnect cryptocurrency fraud in which numerous depositors were allegedly duped in the name of securities investment.”

Indian Authorities Confiscated Other Assets

The ED, operating under the Prevention of Money Laundering Act (PMLA), recently seized digital assets tied to the notorious BitConnect Ponzi scheme.

Alongside the crypto assets, authorities confiscated over $15,000 in cash, a luxury vehicle, and multiple electronic devices during the raid.

These assets were reportedly linked to individuals associated with BitConnect, which defrauded an estimated 4,000 investors across 95 countries, causing losses exceeding $2.4 billion.

Launched in 2016, BitConnect collapsed just two years later, and its founder, Satish Kumbhani, was charged by the US Department of Justice in February 2022.

Kumbhani built a global network of promoters, offering commissions to those who endorsed the scheme.

The report noted:

“During the period from November 2016 and January 2018, the accused persons allegedly collected money from investors worldwide, including those from India.”

In a notable turn of events, one victim, Shailesh Babulal Bhatt, who lost money in BitConnect Coin (BCC), allegedly organised the kidnapping of two of Kumbhani’s employees in 2024, demanding a ransom of 2,091 Bitcoin, 11,000 Litecoin, and approximately $1.7 million (145 million Indian rupees) to recover his investment.

The BitConnect Ponzi Scheme

BitConnect operated from November 2016 to January 2018, defrauding investors of approximately $2.4 billion.

The scheme’s promoters enticed victims with promises of high returns, claiming their investments would benefit from a "volatility software trading bot."

Investors were urged to deposit funds in Bitcoin or cash, believing their capital would generate substantial profits.

In reality, the funds were diverted into wallets controlled by the scheme's organisers.

Authorities have classified BitConnect as a Ponzi scheme, using money from new investors to pay earlier ones.

The platform thrived until its exposure, which led to its eventual collapse.

Investigators traced the illicit flow of funds across various wallets, many of which were concealed through dark web channels.

Despite these challenges, a meticulous analysis of wallet activities, IP addresses, and transaction flows ultimately led to the discovery of the seized digital assets.

BitConnect Conspirators Indicted But One Still on the Run

This recent seizure comes after the indictment of BitConnect founder Satish Kumbhani and chief US promoter Glenn Arcaro.

Kumbhani faces several serious charges, including conspiracy to commit wire fraud, commodity price manipulation, and international money laundering.

If convicted on all counts, he could face up to 70 years in prison.

However, Kumbhani remains a fugitive, still evading prosecution.