tl;dr
Law enforcement authorities in India have seized approximately $190 million in crypto assets linked to the BitConnect Ponzi scheme, which defrauded hundreds of victims before collapsing in 2018. The Enforcement Directorate (ED) conducted searches in the state of Gujarat and seized additional assets,...
Indian authorities have seized approximately $190 million in crypto assets linked to the BitConnect Ponzi scheme, uncovering a fraudulent scheme involving fictitious promises of high returns and untraceable transactions through the dark web. The Enforcement Directorate (ED) conducted searches in the state of Gujarat and seized additional assets, including cash, an SUV, and digital devices.
The scheme allegedly involved amassing funds from global investors, with co-founder Satish Kumbhani establishing a network of promoters who lured investors with false promises of high returns. Despite claims of using a proprietary trading bot for high returns, the perpetrators did not engage in trading and instead controlled the invested funds in digital wallets. The ED traced the crypto wallets and transactions through on-chain tracking and intelligence gathering.
Law enforcement authorities in India reportedly seized crypto assets linked to the BitConnect Ponzi scheme that defrauded hundreds of victims before collapsing in 2018. The Enforcement Directorate (ED) seized approximately $190 million in crypto assets during its investigation of BitConnect. The agency also seized cash, an SUV, and digital devices during searches in the Indian state of Gujarat on February 11th and 15th.
From November 2016 to January 2018, the people behind the scheme allegedly amassed funds from investors around the world, including participants located in India. BitConnect co-founder Satish Kumbhani allegedly established a network of promoters who received commissions when they enticed investors into depositing cash and Bitcoin (BTC) into the purported lending program. The promoters also posted fictitious information on the BitConnect web portal, claiming an average of 1% returns per day or about 3,700% per year.
Despite BitConnect’s representation that it could generate up to 40% monthly returns using a proprietary trading bot, the perpetrators of the scheme did not use the invested funds for trading but deposited them into digital wallets that they controlled. Authorities also say the crypto wallets carried out transactions through the dark web to make them untraceable, but by following on-chain transactions and gathering ground intelligence, the agency identified the wallets and the location of the devices that held the cryptocurrencies.