BitConnect founder charged for defrauding investors in $2.4B crypto ponzi: DoJ
BitConnect founder, Satish Kumbhani, has been charged with defrauding investors in a Ponzi scheme that was worth around $2.4 billion, making it one of the biggest scams in the history of the world. As per the official document from the United States Department of Justice, a San Diego-based federal grand jury charged Kumbhani.
BitConnect founder found guilty
BitConnect, a cryptocurrency investment platform which a peak market cap of $3.4 billion, the founder was charged with "orchestrating a global Ponzi scheme." Satish Kumbhani, 36, from Hemal, India, was the person responsible for misleading the investors with its "Lending Program."As per the document, the founder had misled investors by promising them huge gains by investing in the volatility of cryptocurrencies using the "BitConnect Trading Bot" and "Volatility Software" that guaranteed returns by using investors' money. The document also added that"
"BitConnect operated as a Ponzi scheme by paying earlier BitConnect investors with money from later investors. In total, Kumbhani and his co-conspirators obtained approximately $2.4 billion from investors."It is also noted by the indictment that the founder directed the marketing team to show a rising demand for the BitConnect Coin (BCC), which was the digital currency of the platform after abruptly shutting down the "Lending Program."
Kumbhani evaded U.S. regulations
As per the indictment, Kumbhani also evaded U.S. regulations governing the financial space, "including those enforced by the Financial Crimes Enforcement Network (FinCEN).""This indictment alleges a massive cryptocurrency scheme that defrauded investors of more than $2 billion," said U.S. Attorney Randy Grossman for the Southern District of California. "The U.S. Attorney's Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud."
As per our previous report, BitConnect fraud victims will be eligible for compensation, and Judge Todd W. Robinson approved authorities to liquify $56M worth of crypto. Along with Kumbhani, U.S. promoter Glenn Arcaro was also sentenced.
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