SEC unable to locate BitConnect founder convicted in $2.4B fraud case


Indicted by the United States Division of Justice in a $2.4 billion Ponzi scheme, BitConnect founder Satish Kumbhani stays untraced following conviction.

In a courtroom submitting on Monday, the Securities and Trade Fee stated that the whereabouts of Kumbhani stays unknown. The SEC famous that Kumbhani’s final recognized location was in his native nation India, however has remained untraced ever because the promoter for his BitConnect Ponzi scheme was charged by the SEC for defrauding American buyers of over $2 billion.

SEC in its submitting famous that the convicted founder has most likely fled to a overseas nation and “Kumbhani’s location stays unknown, and the Fee stays unable to state when its efforts to find him will probably be profitable, if in any respect.” The founder is charged with wire fraud, working an unlicensed cash transmitting enterprise, and three conspiracies: committing wire fraud; commodity worth manipulation; and worldwide cash laundering

Associated: SEC expenses 5 for illegally selling $2 billion Bitconnect Ponzi scheme

The BitConnect saga dates again to ICO-era and was among the many most highlighted and talked about tasks on the time. Based in 2016, the crypto challenge grew to become a world sensation by mid-2017 because it raised billions of {dollars} from world buyers. The challenge promised a lending program based mostly on proprietary “buying and selling bot” and “volatility software program” that might supply 10% incomes to buyers through BCC token.

The DOJ charged Kumbhani for operating a Ponzi scheme through BitConnect’s lending program the place the challenge managed to siphon off $2.4 billion from buyers. Bitconnect’s native token BCC recorded an all-time-high buying and selling worth of $463.31 on the peak of the market frenzy in December 2017 reaching a market cap of $3.4 billion. 

The founders rug pulled the challenge by January 2018, crashing the token worth to close zero and inflicting large losses to buyers.

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BitConnect (BCC) worth historical past. Supply: CoinMarketCap

The DOJ additionally accused Kumbhani of making faux market demand for BCC to lure extra unsuspecting buyers. The challenge like many others within the ICO period turned out to be an enormous pyramid scheme the place the creators used early funds to repay previous buyers and later ran away after amassing billions based mostly on hype and ICO craze. . A number of promoters of the challenge throughout Australia and the U.S. have already been convicted and going through jail.