US Charges Indian Citizen in $3.4 Billion Crypto Ponzi Scheme Bitconnect – Regulation Bitcoin News

In the United States, Bitconnect’s founder has been indicted. “If convicted of all counts, he faces a maximum total penalty of 70 years in prison,” said the U.S. Department of Justice.

Bitconnect’s Founder Could Go to Prison for 70 Years

U.S. Department of Justice announced Friday that Bitconnect, the creator of the crypto-fraud scheme Bitconnect, has been arrested.

“Bitconnect is an alleged fraudulent cryptocurrency investment platform that reached a peak market capitalization of $3.4 billion,” the DOJ described, adding:

Today, the federal grand jury indicted Satishkumar Kurjibhai Kubhani (Indian citizen, resident) for multiple criminal offences related to his involvement in a large-scale criminal conspiracy that involved Bitconnect, the cryptocurrency company he cofounded.

The 36-year-old from Hemal, India, misled investors that the scheme’s “Lending Program” was able to “generate substantial profits and guaranteed returns” using “Bitconnect Trading Bot” and “Volatility Software,” the justice department detailed.

The DOJ however noted that:

Bitconnect was a Ponzi scheme that paid Bitconnect investors money taken from other investors. Kumbhani along with his conspirators received $2.4 billion in total from investors.

Further, the indictment alleges Kumbhani shut down BitConnect’s Lending Program abruptly after about a year. He 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),” the DOJ explained.

“Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering,” the Justice Department described, adding:

A maximum penalty for all convictions is 70 years in prison.

Last November, the Justice Department declared that the department was going to sell cryptocurrency worth $56 millions seized from Bitconnect.

What do you think about the DOJ charging Bitconnect’s founder? Comment below.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.