India Intensifies Bitconnect Investigation, Seizing $190M in Crypto

Indian authorities have taken action against one of the largest cryptocurrency fraud cases, confiscating nearly $190 million in digital assets linked to Bitconnect.

The notorious Ponzi scheme, which lured in thousands of investors before collapsing in 2018, has been under investigation for years, with law enforcement now targeting those involved in its operations.

The Enforcement Directorate (ED) in Ahmedabad carried out raids in Gujarat on Feb. 11 and 15, leading to the seizure of various assets beyond cryptocurrency. Officials reportedly took possession of an SUV, electronic devices, and cash totaling approximately $15,582. The assets are believed to belong to individuals connected to the fraudulent scheme, which saw roughly 4,000 victims across 95 countries lose an estimated $2.4 billion.

Bitconnect, which launched in 2016, operated by promising high returns on investments but ultimately collapsed just two years later. U.S. authorities have been pursuing its founder, Satish Kumbhani, who was charged by the Department of Justice in 2022. Investigators say he built a global network of promoters who were incentivized with commissions to bring in more investors. Between 2016 and early 2018, substantial sums of money flowed into Bitconnect, including from Indian investors, before the scheme unraveled.

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The fallout from the scam has been far-reaching, even leading some victims to take extreme measures. In 2024, the ED revealed that Shailesh Babulal Bhatt, who had lost a significant amount of money investing in Bitconnect Coin (BCC), allegedly kidnapped two employees linked to Kumbhani. Reports suggest that Bhatt and his accomplices extorted a ransom of 2,091 Bitcoin, 11,000 Litecoin, and approximately $1.7 million in an attempt to reclaim his lost investment.

Alexander Stefanov