Grand Jury Indicted BitConnect Founder Over $2.4B Crypto Scheme

Grand Jury indicted BitConnect founder Satish Kumbhani over a $2.4 billion crypto scheme but he remains at large according to the data from the Department of Justice so let’s read more today in our latest cryptocurrency news.

The US DOJ announced the indictment of BitConnect founder Satish Kumbhani and the indictment alleged that he and other co-conspirators obtained $2.4 billion from investors in a Ponzi scheme. The Grand jury indicted Kumbhani and revealed that its indictment against him and his co-conspirators obtained $2.4 billion from investors in a Ponzi scheme. The government is charging Khumbani with conspiracy to commit wire fraud and conspiracy to commit commodity price manipulation as well as an unlicensed money transmitting business. The indictment said that BitConnect operated as a Ponzi scheme by paying the investors with money gathered from the new investors. The government alleged that 36-year old Kumbhani misled the investors about the platform and touted its proprietary technology including a “BitConnect Trading Bot” as well as a volatility software.

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— vitalik.eth (@VitalikButerin) December 1, 2017

According to the indictment, Kumbhani claimed that the trading bot and the software could generate huge profits but the proejct guaranteed returns by using the investors’ money to trade on crypto exchange markets. The indictment alleges that Kumbhani directed his network of promoters to manipulate the price of the digit currency BCC and create a fake appearance of legitimate market demand for BCC. The DOJ also alleged that the conspirators all concelaed the location of the fraud’s proceeds by cycling, exchanging, and commingling the funds through a cluster of wallets and crypto exchanges.

Launched in 2016, BitConnect was promoted on social media, Youtube, and all over the internet while in2 017 the coin of the platform was trading at an all-time high of $463.31 according to CoinMarketCap.com. Today, Bitconnect is valued at around $0.67. BitConnec’ts price crashed during the crash on the markets in 2017 and early 2018. Both North Carolina and Texas issued cease and desist orders to the platform demanding it to stop offering services for residents.

When the company announced it was shutting down the lending platform, it offered to pay investors but rather than cashing out in the BTC that was invested, the platform sent the investors some BCC coins. In 2021, Los Angeles resident Glenn Arcaro who was a promoter of Bitconnect pleaded guilty in federal court for his participation in what the DOJ called “massive conspiracy involving Bitconnect” which misled investors about the purported technology and managed to defraud investors from the US and abroad.