Crackdown on Crypto Fraud in Gujarat
Indian authorities have seized nearly $190 million in digital assets tied to the infamous BitConnect Ponzi scheme, marking a major enforcement action against cryptocurrency fraud. The Enforcement Directorate (ED) in Ahmedabad conducted raids on February 11 and 15, confiscating not only cryptocurrencies but also $15,500 in cash, an SUV, and multiple electronic devices.
BitConnect: A Multi-Billion Dollar Ponzi Scheme
Launched in 2016, BitConnect lured investors with promises of 40% monthly returns, allegedly generated by a “volatility software trading bot.” However, investigations revealed that it was nothing more than a Ponzi scheme, using funds from new investors to pay earlier participants. The scam defrauded over 4,000 investors across 95 countries, amassing nearly $2.4 billion before collapsing in 2018.
BitConnect’s founder, Satish Kumbhani, was charged by the U.S. Department of Justice (DOJ) in February 2022 but managed to evade capture—until now. Indian authorities have traced him to Ahmedabad and issued a lookout notice to prevent his escape. Investigators discovered that Kumbhani and his associates funneled investor funds into digital wallets, often using the dark web to obscure transactions.
India’s Push to Combat Crypto Fraud
This latest enforcement action signals India’s strong stance against cryptocurrency-related fraud and its commitment to protecting investors. The ED is now working on restitution plans for victims, including foreign nationals who suffered losses.
The BitConnect case serves as a warning about the risks of high-return investment schemes in crypto markets. It underscores the importance of due diligence and regulatory oversight in the fast-evolving digital asset space.
