Unlike the BCC token that died several years ago, the case of Bitconnect – the cryptocurrency project that gave rise to the aforementioned cryptocurrency – is still far from over.
This Friday, the US Department of Justice announced that one of the founders of BitConnect has been formally indicted on fraud charges associated with the most famous Ponzi scheme in the cryptocurrency world.
The drama is not over
On a official press release, the Justice Department said Satish Kumbhani, 36, of Hemal, India; was charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operating an unlicensed money transmission business, and conspiracy to commit international money laundering.
All charges are associated with the operation of Bitconnect. This service was sold as a lending program that turned out to be a pyramid business of global dimensions, ranking 20th on the list of cryptocurrencies with the largest market capitalization.
As explained by the Department of Justice, Kumbhani defrauded an unspecified number of investors, raising nearly $2.4 billion in illicit funds.
Kumbhani created a scheme in which he offered a trading bot service and volatility software, promising that those using Bitconnect would make substantial profits in cryptocurrencies. The reality was that customers made money in proportion to the people they were able to engage in the business and were paid with money from new users – which was characteristic of a Ponzi scheme.
Special Agent in Charge Eric B. Smith of the FBI’s Cleveland Field Office said in official statements that the Bitconnect case was indicative of the scope of operations of fraudsters entering the cryptocurrency world, looking for an opportunity to circumvent the law:
“Today’s indictment reiterates the FBI’s commitment to identifying and addressing bad actors who defraud investors and tarnish the ability of legitimate entrepreneurs to innovate in the emerging cryptocurrency space. Dressing a tried-and-true fraud scheme with a fresh twist and basing it overseas will not stop the FBI’s determination and dedication to meticulously investigating and bringing these fraudsters to justice.”
The SEC also has a track record with Bitconnect
As CryptoBuyClub previously reported, US authorities are actively investigating the case, hunting everyone involved and seeking to seize as much money as possible. In May 2021, the United States Securities and Exchange Commission (SEC) The United States Securities and Exchange Commission (SEC) filed a lawsuit against five individuals associated with BitConnect. Satish Kumbhani was not on the list.
A short time later, the SEC reached a settlement with three of them, obtaining more than $12 million worth of BTC and fiat currency in fines.
And late last year, the SEC obtained a judgment against Glenn Arcaro and his company Future Money for violations of the Securities Act and the Exchange Act.
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