The Enforcement Directorate (ED) has seized cryptocurrencies worth ₹1,646 crore (approximately $197 million) in connection with the infamous BitConnect scam. The operation, conducted in Ahmedabad, also led to the confiscation of ₹13.5 lakh in cash, an SUV, and several digital devices, as reported by officials.
The BitConnect Scam: A Global Ponzi Scheme
The BitConnect scam, which spanned across the globe, promised investors high returns by utilizing a so-called “high-tech” trading bot. Founded by Satish Kumbhani, BitConnect enticed people with the prospect of earning up to 40% monthly profits by converting Bitcoin (BTC) into its own digital currency, BitConnect Coin (BCC). The platform also incorporated a multi-level marketing (MLM) structure, encouraging participants to recruit new investors in exchange for rewards.
Running from November 2016 to January 2018, BitConnect promised extraordinary profits through its “volatility software trading bot.” Investors were lured into depositing Bitcoin, which was converted into BCC. The MLM aspect of the platform further fueled its reach, typical of Ponzi schemes.
However, the platform collapsed in January 2018 after regulators worldwide intervened, leaving thousands of investors with significant losses. The ED’s investigation, which began in 2018 following FIRs filed by Surat’s CID, has already led to the attachment of assets worth ₹489 crore related to the scam.
Previous ED Actions and Ongoing Investigation
This recent seizure is not the first time the ED has acted against BitConnect. Previously, assets worth ₹489 crore were attached in relation to the case. Additionally, authorities have confirmed the involvement of foreign nationals in the scam, and Satish Kumbhani, the founder, remains under investigation by U.S. federal agencies.
As the investigation continues, the ED is taking significant steps to recover assets and hold accountable those involved in defrauding investors on a global scale.
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