New Delhi: BitConnect founder Satish Kumbani, accused of running a $2.4 billion crypto Ponzi scheme in the US, has relocated from India to a hidden place outside India.
It is reported that a US grand jury recently indicted him for orchestrating a global Ponzi scheme through his cryptocurrency platform, according to a Justice Department statement.
On Friday, prosecutors said the 36-year-old misled investors about his platform’s propriety technology. He promised high returns but they did not get what was offered to them. The US also alleged that BitConnect diverted the money of new investors to pay earlier ones. They were also operating a money transmitting business without any licence.
”Since November, the commission has been consulting with that country’s financial regulatory authorities in an attempt to locate Kumbani’s location remain unknown,” said SEC attorney Richard Primoff in a court filing, according to media reports.
What is BitConnect?
BitConnect is based on an open-source and peer-to-peer protocol. The decentralized digital allows people to invest their money in the currency for profit. It reached a peak market capitalization of $3.4 billion.
US Department of Justice’s indictment order
The Department of Justice said in its indicted order, ”The indictment further alleges that, after operating for approximately one year, Kumbhani abruptly shut down the Lending Program. Kumbhani 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), to create the false appearance of legitimate market demand for BCC.”
According to the Department, Kumbhani committed wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering.
Notably, he will be sent to jail for 70 years if convicted of all counts.
The final judgement in the case will come from a federal district court judge as per the US Sentencing Guidelines and other statutory factors.
