Scams

The Head of the Well-known Scam BitConnect Finally Arrested

The Head of the Well-known Scam BitConnect Finally Arrested

The mastermind and the man behind the cryptocurrency company and scam BitConnect, Divyesh Darji – head of Asia, has been arrested as he arrived from Dubai. He and his conspirators are accused of ‘stealing’ millions of dollars from Indian investors.

BitConnect has been a dark cloud surrounding cryptocurrencies and has not been helping the mainstream acceptance of the new digital assets. Even Youtube was not able to work as a gatekeeper, to protect users from BitConnect advertising. Now, the terrible story continues to unravel around the world. This time, the main profile and mastermind of the scam, Divyesh Darji, has been arrested by the police, Gujarat CID, from Dehli Airport as he arrived from Dubai.

BitConnect had its registered office in London, but the address was just a front, and earlier this year, it was revealed that there was no office. The company was managed in Surat by Divyesh Darji, Satish Kumbhani and Dhaval Mavani. BitConnect promised investors an annual return of 365% or 1% a day, said an official. If that lure was not enough, the company also encourage larger investments for larger returns. For all different investments, you had to lock your money for 120 days.

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Like with all Ponzi schemes, new entrants money pays earlier investors, and it went well to the beginning of 2018. When investors started to become skeptical and tried to withdraw their money, BitConnect could not sustain their operations and went bust.

Bitconnect and scams like it were a perfect storm. Why keep money in fiat, in government paper when its publisher can decide to take the wealth from the average Indian instantly. Instead catch this Bitcoin train so much in the media, with Bitconnect promising forever returns as it supposedly used invested bitcoin to pay for still other Bitcoiners’ returns.

P G Narwade of Criminal Investigation Department (CID-Crime) of Gujarat police said, “Darji was living in Dubai. A look-out circular was issued against him. The Immigration Department alerted us when he was on the way from Dubai to Ahmedabad, after which he was arrested today evening. The company came into existence in 2016, and in 2017, it launched the Bitconnect coin. It remained active till January this year. It released 2.80 crore coins, out of which 1.80 crore coins were sold to investors. The accused held seminars, events in India and other countries promising high interest — daily interest rate of 1 per cent — on investment in Bitconnect coins. The cost of one Bitconnect coin on January 16, 2018, when the company shut down, was USD 362.”

Even though it is good news that Darji has been arrested, the cryptocurrency market is unregulated, is new and still developing. Even most of the Initial Coin Offerings were scams according to a study, released earlier this year. In some sense, it is good that the BitConnect story is revealed so investors can be more careful. If something sounds too good to be true – it usually is.

Image Source: “Youtube’

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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.