Indian authorities have made a significant breakthrough in the ongoing investigation into the BitConnect crypto-Ponzi scheme, seizing over $250 million in assets linked to the fraud operation. This report provides an overview of the seizure, the methods employed by Indian authorities, and the potential implications for BitConnect investors.
BitConnect Background:
BitConnect, a now-defunct cryptocurrency investment platform, promised investors monthly returns of 40% through a proprietary “lending program” and a trading bot that supposedly exploited volatile cryptocurrency prices. In reality, the platform operated as a Ponzi scheme, funneling investors’ cryptocurrency into wallets controlled by BitConnect founder Satish Kumbhani and promoter Glenn Arcaro. In 2021, the U.S. Securities and Exchange Commission (SEC) charged BitConnect and its operators and alleged that the scheme defrauded investors of billions of dollars.
At the time of its collapse, BitConnect held 325,000 Bitcoin, which were valued at approximately $2 billion. Given the increase in Bitcoin’s value since 2024, the seized assets only represent a fraction of the missing funds.
Read our BitConnect Reports here.
Details of the Seizure:
India’s Directorate of Enforcement announced the seizure of “various cryptocurrencies” valued at Rs. 1646 Crore ($190 million), along with Rs. 486 Crore ($56 million) worth of “movable and immovable properties” connected to BitConnect. A Lexus was also seized.
Methods Employed:
The Directorate of Enforcement said it conducted an in-depth examination of “the complex web of transactions carried in numerous crypto wallets to unmask the origin and controllers of said crypto wallets.” The investigation revealed that many transactions were carried out through the Dark Web to obscure their origin. The ED was able to track numerous web wallets and gather intelligence to locate the devices containing the crypto assets.
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