Indian police have launched an investigation into Bitconnect and booked its founder after a bitcoin investor was reported to have been duped by a global crypto “Ponzi scheme”. According to US officials, the scheme reached a market capitalization of $3.4 billion at its peak. The founder and his co-conspirators reportedly received about $2.4 billion from investors.
Bitconnect’s founder sought by Indian police
The founder of one of the most famous fraudulent cryptocurrency investment schemes, Bitconnect, is wanted by the Indian police in the city of Pune, Maharashtra, after the US induced him to defraud investors.
The Pune Police on Tuesday launched an investigation into the multi-crore crypto scheme after a local lawyer filed an FIR and registered a case against its founder Satish Kumbhani. He also named six other people involved in the scheme. The lawyer said in the FIR that he was defrauded for around 220 bitcoins.
Indian Police is now looking for the accused but no one has been arrested. They are also probing whether the same people duped more investors.
Kumbhani, an Indian national, is already being investigated by the Federal Bureau of Investigation (FBI). The US implored him in February for his role as the founder of a fraudulent crypto scheme. The US Department of Justice (DOJ) calls Bitconnect a “global Ponzi scheme”:
Bitconnect, an alleged fraudulent cryptocurrency investment platform, has reached a peak market capitalization of $3.4 billion.
The Justice Department explained that Kumbhani, 36, from Hemel, India, “misled investors” about Bitconnect’s lending program. They claimed that it uses proprietary technology called “Bitconnect trading bots” and “volatility software” to “generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of the cryptocurrency exchange market.” The authority emphasized:
Bitconnect operates as a Ponzi scheme by paying first Bitconnect investors with money from subsequent investors.
In total, Kumbhani and his co-conspirators received approximately $2.4 billion from investors, the DOJ said.
What do you think of the Indian police searching for the founder of the Bitconnect “ponzi scheme”? Let us know in the comments section below.
image credit: Shutterstock, Pixabay, WikiCommons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation or recommendation or endorsement of an offer to buy or sell any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the Company nor the author is responsible, directly or indirectly, for any damage or loss alleged to be caused by or in connection with the use or reliance on any materials, goods or services mentioned in this article.