The Indian Enforcement Directorate (ED) has arrested Shailesh Babulal Bhatt, a resident of Gujarat, in connection with a significant cryptocurrency extortion case worth over ₹1,200 crore (approximately $148 million). Bhatt, who has a history of involvement in kidnapping and extortion, was taken into custody earlier this week, as confirmed by the ED on Saturday.
Background of the Case
The case traces back to the collapse of Bitconnect Coin, a cryptocurrency platform that promised high returns to investors. In January 2018, Satish Kumbhani, the operator of Bitconnect Coin, abruptly shut down the platform and disappeared with substantial funds invested by users. This move led to widespread financial losses and a flurry of legal actions.
Bhatt, a former investor in Bitconnect Coin, resorted to drastic measures to recover his lost investment. Allegedly, he kidnapped two of Kumbhani’s employees and demanded a ransom paid in cryptocurrency and cash. The extortion involved significant amounts of digital assets, including 2,091 Bitcoins (valued at $125 million), 11,000 Litecoins, and ₹14.50 crore in cash. The total value of the extorted assets is now estimated at ₹1,232.50 crore (approximately $146 million).
Investigation and Findings
The ED’s investigation into Bhatt’s activities revealed that he distributed ₹289 crore ($1.7 million) of the extorted funds among his accomplices. These funds were utilized for purchasing properties, gold, and other valuable assets. The ongoing probe is part of a broader effort to address money laundering and other illegal activities associated with cryptocurrency scams.
Implications and Future Actions
Bhatt’s arrest marks a significant development in the fight against financial crimes involving cryptocurrencies. The ED’s investigation continues to explore the full extent of the extorted funds’ usage and their hidden locations. This case highlights the growing concern over the use of digital currencies in illegal activities and the need for stringent measures to combat financial crimes in the crypto space.
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