BitConnect founder Satish Kumbhani is indicted by a US grand jury and charges with multiple crimes for his alleged role in a massive criminal conspiracy involving Bitconnect, The global Ponzi scheme that raised $2.4 billion from investors in a fraudulent cryptocurrency investment platform, according to a Justice Department statement.
The 36-year-old indian citizen, misled investors with false promises,where BitConnect claimed the proprietary technology, the scheme’s “Lending Program” was able to “generate substantial profits and guaranteed returns” using “Bitconnect Trading Bot” and “Volatility Software,” the justice department detailed.
However, the DOJ noted that Bitconnect operated as a Ponzi scheme by paying earlier Bitconnect investors with money from later investors. In total, Kumbhani and his co-conspirators obtained approximately $2.4 billion from investors.
The indictment further alleges that Kumbhani abruptly shut down the Lending Program after about one year. He then “directed his network of promoters to fraudulently manipulate and prop up the price of BitConnect’s digital currency, a commodity known as Bitconnect Coin (BCC),” the DOJ explained.
“Crime, particularly crime involving digital currencies, continues to transcend international boundaries,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.
“Kumbhani is charged with conspiracy to commit wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering,” the Justice Department described, adding: If convicted of all counts, he faces a maximum total penalty of 70 years in prison.
In November 2021, the Justice Department announced that it was selling cryptocurrency worth $56 million seized from the Bitconnect scheme.