Satish Kumbhani, the notorious crypto exchange called BitConnect’s founder, has been alleged for supposedly deceiving the investors on a worldwide scale and scamming them of nearly $2.4B. As per the DOJ (Department of Justice), a federal-level jury based in San Diego has particularly alleged the founder of organizing the accused Ponzi scheme through the Lending Program of BitConnect.
The agency stated that the respective Ponzi scheme was run through recompensing of the funds to the previous investors by taking from the latest ones. Generally, Kumbhani as well as the collaborators thereof in the respective Ponzi program acquired nearly $2.4 billion out of the investors. In 2017, when a considerable hype was created by the respective project, BCC (BitConnect) achieved the peak of its trading price at $463.31, and the DOJ mentions that the highest valuation of the project was up to $3.4B.
Nonetheless, the price of the respective project shortly collapsed just in some of the next months, resulting in huge losses on the side of the investors. Kumbhani – the resident of Gujarat (India) – supposedly asserted that the investors of the project would receive considerable gains under the Lending Program of BitConnect.
The accusation adds that the Indian founder of the Ponzi scheme utilized a proportion of the funds acquired through deceiving unique investors to recompense to the older consumers until the sudden shut down of the respective Ponzi scheme on the behalf of the founder thereof.
The agency also disclosed that the Indian founder along with the collaborators thereof feigned that their project was highly demanded across the market, as they manipulated the market. The subsequent investments were supposedly kept hidden and transacted through the crypto wallets’ cluster under BitConnect as well as several other international exchanges of cryptocurrency.
Formerly in 2021’s September, Glenn Arcaro (the former promoter of BitConnect was found guilty of having defrauded the investors, thus supporting the allegations of the DOJ. In addition to this, the accusation reveals that the regulations of the United States were evaded by Kumbhani as the project failed to have a registration with the FinCEN (Financial Crimes Enforcement Network, as demanded by the Bank Secrecy Act.
The press release of the department specified that the charges leveled against the Indian founder take account of wire fraud, worldwide money laundering conspiracy, execution of a business of transmitting money, as well as conspiracy to attempt manipulation of commodity prices.