DOJ indicts BitConnect’s Indian founder for $2.4B crypto Ponzi plot

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The founding father of the defective crypto trade BitConnect, Satish Kumbhani, has been charged for allegedly misleading investors globally and defrauding them of $2.4 billion within the formulation.

Per the Department of Justice (DOJ), a San Diego-based entirely mostly federal big jury specifically charged Kumbhani for orchestrating the alleged Ponzi plot through BitConnect’s “Lending Program”:

“BitConnect operated as a Ponzi plot by paying earlier BitConnect investors with money from later investors. In complete, Kumbhani and his co-conspirators bought roughly $2.4 billion from investors.”

BitConnect (BCC) price history. Supply: CoinMarketCap

Abet in 2017 amid the hype, BitConnect (BCC) recorded an all-time excessive of $463.31 in shopping and selling price, which in keeping with the DOJ reached a height market capitalization of $3.4 billion. On the different hand, as evidenced by the graph above, the prices soon collapsed within a pair of months causing huge losses to investors. 

Kumbhani, who resides in Gujarat, India, allegedly promised investors “ to generate tall profits and warranted returns” below the BitConnect’s “Lending Program.” The indictment alleges Kumbhani former the funds from recent investors to partially pay aid the earlier investors till shutting down this design — working a textbook Ponzi plot.

The DOJ further said that Kumbhani and his co-conspirators faked market ask for BCC through market manipulation. The consequent investments were allegedly concealed and transferred through “BitConnect’s cluster of cryptocurrency wallets and diversified internationally-based entirely mostly cryptocurrency exchanges.”

Supporting DOJ’s allegations, aid in Sept. 2021, frail BitConnect promoter Glenn Arcaro pled responsible to fraud prices connected to his feature within the now-defunct crypto trade and lending platform.

The indictment also alleges that Kumbhani evaded U.S. guidelines by failing to register with the Financial Crimes Enforcement Community (FinCEN), as required below the Bank Secrecy Act.

All in all, “Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting trade, and conspiracy to commit world money laundering,” acknowledged the DOJ press birth.

The case is currently being investigated by the FBI Cleveland Subject Situation of enterprise and IRS Felony Investigation (CI). If convicted of all counts, Kumbhani will likely be self-discipline to a maximum complete penalty of 70 years in prison. As well, the DOJ recommends all BitConnect investors register themselves as seemingly victims.

Connected: SafeMoon pump-and-dump lawsuit targets Jake Paul, Soulja Boy and others

On Feb. 20, a brand recent class-motion lawsuit demanded a jury trial against current celebrities and influencers for their alleged participation in a conventional pump-and-dump plot pertaining to to SafeMoon tokens.

As Cointelegraph reported, the lawsuit alleged that SafeMoon and its subsidiaries mimicked true-lifestyles Ponzi schemes by misleading investors to opt SafeMoon tokens below the pretext of unrealistic profits.

Earn your fighter #SafeMoon #BitConnectttttt pic.twitter.com/b1GMnMHxuF

— W◎◎F of Wall Freeway | CwooFA (@WoofManCapital) April 21, 2021

Drafted by plaintiffs Bill Merewhuader, Christopher Polite and Tim Viane, the lawsuit looks to be like to characterize and compensate all participants who sold SafeMoon tokens since March 8, 2021, and were victims of the alleged rug pull strive.