US States Ask Indian Officials to Seize Assets of BitConnect Promoters

US States Ask Indian Officials to Seize Assets of BitConnect Promoters

Authorities from the states of Illinois and Arizona have formally contacted the Criminal Investigation Department (CID) of India with a request to seize the property of a couple of BitConnect promoters. According to the Times of India report, one suspect has already been apprehended, while his accomplice is still on the run, possibly with a large amount of BTC belonging to defrauded investors.

BitConnect (BCC) was an open-source digital currency, described by many as simply a Ponzi scheme. The scam became an Internet hit, following the ridiculous motivational pitch by Carlos Matos but was once among the 20 largest virtual currencies until its price plummeted at the turn of the year. Divyesh Darji, the mastermind behind the scam, was finally arrested in the airport of Delhi last month.

In December 2017, BCC hit an all-time high of $463 but plunged shortly thereafter to be valued at around $6 a month later. BCC trading has come to an end on September 10th, as Trade Satoshi, the last exchange to still offer BCC token trading, has removed it. It was valued at around $0.68 at the time.

Mr. Darji along with his accomplice Satish Kumbhani started the BitConnect venture in December 2016, following the demonetization in India. The fraudsters managed to trick a large number of investors to exchange their BTC into BCC, promising a ludicrous 800% yearly return on investment.

An unnamed CID investigator claimed that “At the time, one BitConnect coin was worth about $360 and people invested their Bitcoins due to the attractive returns promised. While Darji was arrested from the Delhi airport on his way back from Dubai, Kumbhani is still absconding. […] Kumbhani was tracked down to South Korea some time ago, but by the time we could react, he had flown back to Dubai. He supposedly handled the worldwide operations of the company and may have possession of a large amount of money in Bitcoins, which belongs to investors.“

The news outlet claims that Darji made a 10 percent commission on all investments brought on his behalf. He spoke fluent English and ran several social welfare programmes, which helped to deceive unsuspecting investors. Reportedly, “Darji had brought in investments of Rs 4,100 crore ($566 million) while the total amount invested in Bitconnect could be around Rs 41,000 crore ($5.6 billion).”

Illinois and Arizona authorities contacted the CID to seize the BitConnect promoters property as “citizens of these states had invested in the company and lost money.“

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