Indian authorities have seized cryptocurrency valued at $190 million (approximately Rs 1,646 crore) as part of an ongoing investigation into the notorious BitConnect Ponzi scheme.
According to The Indian Express, the Enforcement Directorate (ED), responsible for investigating financial crimes, conducted searches across Gujarat on February 11 and 15. In addition to the seized cryptocurrency, the ED also confiscated $16,300 (Rs 13,50,500) in cash, an SUV, and various digital devices.
The investigation is being carried out under the Prevention of Money-Laundering Act (PMLA), following initial cases filed by Surat’s CID Crime Police Station.
BitConnect’s Fraudulent Operations
BitConnect, a global Ponzi scheme, operated between November 2016 and January 2018, attracting investors from around the world, including India. The unregulated platform promised returns of up to 40% per month through a purported “volatility software trading bot.”
The scheme misled investors by showing fictitious returns on its website, claiming nearly 1% daily returns, which would amount to an astronomical 3,700% annually. As with most Ponzi schemes, BitConnect used funds from new investors to pay returns to earlier participants.
By the time the platform collapsed, it had amassed $2.4 billion globally from victims. The scheme came to an end when U.S. state regulators issued cease-and-desist orders, exposing the fraudulent nature of the operation.
Authorities allege that the BitConnect operators diverted investor funds to digital wallets controlled by the accused, rather than engaging in any legitimate trading activities. Investigators uncovered a complex network of cryptocurrency transactions, many of which were conducted via the dark web to obscure their origin. However, through meticulous ground intelligence, authorities were able to trace several web wallets and locate digital devices containing the seized cryptocurrency.
Continued Investigations
This recent seizure adds to the ED’s previous actions in the case, which included the attachment of assets worth $56.5 million (Rs 489 crore). Sources suggest that foreign nationals were also involved as investors in the scheme, and U.S. federal authorities are now investigating the main accused.
The ongoing investigation highlights the global scope of the BitConnect fraud and the efforts of Indian authorities to hold those responsible accountable.
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