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U.S. Department of Justice Charged BitConnect Founder over $2.4B Crypto Scam

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Joyashree Dey Follow

INDIA

Mar, 01 2022

Mar, 01 2022

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On February 26, the U.S. Federal Grand Jury announced its prosecution against Satish Kumbhani, the founder of popular cryptocurrency platform BitConnect, for acquiring around $2.4 billion from investors in a Ponzi scheme.

The U.S government is accusing Kumbhani of conspiracy to commit wire fraud, conspiracy to commit commodity cost manipulation, the activity of an unlicensed cash transmitting business, and conspiracy to commit global tax laundering.

The accusation indicates that BitConnect worked as a Ponzi scheme by paying early BitConnect investors with cash assembled from newbie investors. The government asserts the 36-year-old Kumbhani misdirected investors regarding BitConnect's "lending platform," by promoting its implied exclusive technology, including a "BitConnect Trading Bot" and " Volatility Software.”

As indicated by the indictment, Kumbhani asserted BitConnect's exchanging bot and volatility software could create significant benefits; the venture evidently ensured returns by utilizing investors' cash to exchange on unstable cryptocurrency trade markets.

The indictment asserts that Kumbhani guided his organization of advertisers to deceitfully control and prop up the cost of BitConnect cryptocurrency, BitConnect Coin (BCC), to make the deception of genuine market interest for BCC.

The Department of Justice additionally claims Kumbhani and his co-schemers disguised the area of the fraud's returns by coexisting, cycling, and trading the assets through a bunch of wallets and globally based cryptocurrency exchanges.

"The U.S. Attorney's Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud," Said U.S. Attorney Randy Grossman for the Southern District of California.

Whenever indicted for all counts, Kumbhani faces an extreme punishment of 70 years in jail.


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Joyashree Dey

CBW - External Analyst

INDIA

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