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BitConnect Founder Under Investigation by Indian Police Following Indictment in the US

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BitConnect founder seems to be in trouble. Indian authorities are currently looking into Satish Kumbhani, the creator of the bitcoin investment website BitConnect, for the multi-million dollar fraud.

According to reports, Kondhwa Budruk, a lawyer from Pune, reported the incident to the cybercrime police on August 16.

As per the initial information report (FIR), the lawyer allegedly lost close to 220 bitcoins, which are roughly worth $5.14 million on the open market. Kumbhani (36) and six other people have been named by the attorney. According to the report, no arrests have reportedly been made thus far.

BitConnect founder was earlier charged with Ponzi scheme allegations

The BitConnect founder was charged by a federal jury in San Diego earlier in February on charges of running a Ponzi scheme. According to this, the founder was discovered to have stolen up to $2.4 billion from later investors by using their money to pay off early investors.

The FIR claims that the complainant in this instance was defrauded of both his initial investment of 54 bitcoins and the returns of 166 bitcoins, which he was reportedly compelled to reinvest in the sites between 2016 and June 2021. Kumbhani and his friends reportedly defrauded investors in a virtual currency scheme, according to senior police inspector DS Hake.

The report was released a few days after Nirmala Sitharaman, India’s finance minister, expressed new worries about investing in virtual assets. “The government has issued an alert. Sitharaman cautioned the general public and startup business owners, “I think all of us will have to express our ideas and act with a little caution on this.

Her remarks also follow an ongoing investigation in which the Indian Enforcement Directorate (ED) froze the bank account of one of the directors of Zanmai Lab Private Ltd, the company that runs the Indian cryptocurrency exchange WazirX, and blocked bank assets worth approximately $46 million that belonged to the troubled crypto exchange Vauld.

BitConnect founder accused of Ponzi scheme has vanished

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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.