Indian-origin founder of Bitconnect in US indicted for running $2.4 billion global Ponzi scheme

The US Justice Department has implicated Satish Kumbhani, the founder of defunct cryptocurrency platform Bitconnect, for “orchestrating” a $2.4 billion (about Rs 18,110 crore) global crypto Ponzi scheme. Kumbhani, 36, has been charged with conspiracy to commit wire fraud and misappropriation of prices, as well as operating an unlicensed money transmitting business and conspiracy to commit international money laundering. If convicted on all counts, Kumbhani could face a maximum jail term of 70 years.

The Indian-origin founder allegedly duped people into investing in his fraudulent cryptocurrency platform, which promised great returns for true returns. according to this court documentsThe 36-year-old mastermind allegedly misled investors about the platform’s alleged proprietary technology – the Bitconnect trading bot and volatility software.

Kumbhani reportedly touted these software suites as being able to generate substantial profits by trading on the volatility of the cryptocurrency exchange markets.

Attorney Randy Grossman for the Southern District of California said “this indictment alleges massive” cryptocurrency The scheme defrauded investors of over $2 billion (about Rs 15,000 crore). The US Attorney’s Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud.

bitconnect Essentially the money from the new investors was used to pay off the former and also operated as an unlicensed money remittance business. US officials confirmed this in an indictment order posted online.

At the height of its fame, Bitconnect reached a peak market capitalization of $3.4 billion (about Rs 25,660 crore). But, in 2018 the threads started to unravel. The company closed its exchange in January of the same year after receiving cease-and-desist letters from regulators in Texas and North Carolina.

The indictment says the global fallout was swift, South Korean investors went “crazy” and a promoter informed Kumbhani that people were discussing suicide in chat rooms.

The US Securities and Exchange Commission filed charges against Kumbhani for securing over $2 billion (about Rs 15,000 crore) in an unregistered offering on 1 September 2018. Glenn Arcaro, the main promoter of Bitconnect in North America, pleaded guilty that day.

Korner, special agent-in-charge of the IRS Criminal Investigation (IRS-CI), said, “As cryptocurrencies gain popularity and attract investors around the world, alleged fraudsters such as Kumbhani are increasingly trying to defraud investors. are using complex schemes, often stealing millions of dollars.” ) Los Angeles Field Office.

Make no mistake, however, our agency will continue our long tradition of following money, whether physical or digital, to expose criminal schemes and hold fraudsters accountable for their illegal acts of deceit and deceit. To stay,” he said.


Cryptocurrency is an unregulated digital currency, is not legal tender and is subject to market risks. The information in this article is not intended to be financial advice, business advice or any kind of advice or recommendation given or endorsed by NDTV. NDTV shall not be liable for any loss arising out of any investment based on any alleged recommendation, forecast or any other information contained in the article.

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