Satish Kumbhani, the founder of BitConnect, has gone missing a week after being charged in a $2.4 billion Ponzi scheme that allegedly deceived investors in the United States.
The US Department of Justice (DoJ) indicted Kumbhani, an Indian citizen, with criminal charges last week. In September 2021, the Securities and Exchange Commission (SEC) filed a separate lawsuit against Kumbhani, alleging that he fraudulently obtained more than $2 billion for BitConnect. The issue currently is that Kumbhani is no where to be found.
Officials stated in a legal filing on Monday that Kumbhani has most likely left India and that his whereabouts are uncertain. This comes after the SEC learned in October 2021 that Kumbhani had likely moved from India to an unfamiliar address in another country.
Extension plea in BitConnect’s founder missing case
Richard G. Primoff, senior trial counsel in the filing has requested an extension until May 30 from U.S. District Judge John Koeltl.
Primoff also stated that the Commission has been in contact with the country’s banking regulatory agencies since November in an effort to track out Kumbhani’s address. At this time, however, Kumbhani’s whereabouts are unclear, and the Commission is unable to say when, if ever, its attempts to identify him will be successful. He further stated,
“The Commission did not know the whereabouts of Kumbhani, an Indian citizen, at the time it filed this action, and BitConnect is an unincorporated entity the Commission must serve through its manager, Kumbhani.”
BitConnect, which was founded in 2016, was one of the biggest and most popular projects in the mid-2017 initial coin offering (ICO) craze, raising billions of dollars from international investors for a protocol that allegedly paid out 10% in interest earnings via its BCC token to investors, with users who “referred” other investors receiving even more benefits.
However, platform administrators closed BitConnect’s earning platform on January 16, 2018, when the company’s product came under growing scrutiny from legislators and investors. In the days following the platform’s collapse, BCC prices plunged to below $1 from a prior peak of about $500.
Such circumstances sparked a legal struggle in the United States to bring BitConnect’s founders to justice, with Kumbhani and American citizen Glenn Arcaro at the heart of the plan. On 1 September 2021, Arcaro pleaded guilty to criminal counts, comprising conspiracy to commit wire fraud and criminal forfeiture.