The Enforcement Directorate (ED) has made a significant breakthrough in the investigation of the BitConnect scam by confiscating cryptocurrencies worth Rs 1,646 crore (approximately $197 million). The operation, which took place in Ahmedabad, also led to the seizure of Rs 13.50 lakh in cash, an SUV, and various digital devices, according to officials.
The BitConnect scam, masterminded by Satish Kumbhani, operated on a global scale and deceived investors by promising high returns through a supposedly advanced trading bot. The platform enticed investors with the promise of up to 40% monthly profits by converting Bitcoin into BitConnect’s own digital currency. Additionally, the scheme included a referral system that resembled a multi-level marketing scam, encouraging investors to bring in more people.
The scam ran from November 2016 to January 2018, attracting investors with the lure of substantial monthly returns through a so-called volatility software trading bot. Investors were persuaded to deposit Bitcoin, which was then converted into BitConnect’s cryptocurrency. The platform’s MLM structure rewarded users for recruiting new investors, a characteristic feature of Ponzi schemes.
The collapse of the BitConnect platform in January 2018, following intervention by global regulators, left thousands of investors facing significant losses. The ED’s investigation, initiated in 2018 based on FIRs filed by Surat’s CID, has already led to the attachment of properties worth Rs 489 crore linked to the scam. This is not the first time the ED has taken action against BitConnect, as assets worth Rs 489 crore were previously attached in connection with the case.
Authorities have confirmed that foreign nationals also invested in BitConnect, and Kumbhani is currently under investigation by US federal agencies. The recent seizure of cryptocurrencies worth Rs 1,646 crore marks a significant milestone in the ongoing efforts to bring those responsible for the BitConnect scam to justice.