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


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.

Joyashree Dey
CBW - External Analyst
INDIA