BitConnect Scam: Indian Authorities Seize $189M in Crypto Assets

Indian authorities have made a significant breakthrough in the long-running investigation into the BitConnect scam. The Enforcement Directorate (ED) in Ahmedabad has seized cryptocurrency assets valued at $189 million, marking a major milestone in the case.

The ED's operation, conducted under the Prevention of Money Laundering Act (PMLA), led to the confiscation of digital assets linked to BitConnect's operators. Authorities also seized over $15,000 in cash, a luxury vehicle, and several electronic devices during the raid.

BitConnect operated between November 2016 and January 2018, deceiving investors out of an estimated $2.4 billion. Promoters of the scheme lured victims with promises of high returns using a so-called "volatility software trading bot." Investors were encouraged to deposit funds in Bitcoin or cash, believing their investments would generate significant profits. Instead, the funds were siphoned into wallets controlled by the scheme's organizers.

The platform operated as a Ponzi scheme, using funds from new investors to pay earlier participants. It flourished until authorities exposed the deception, leading to its collapse. Investigators traced the movement of funds across various wallets, many of which were deliberately concealed using the dark web, making tracking difficult. However, detailed analysis of wallet activities, IP addresses, and transaction flows eventually led authorities to the digital assets.

This latest seizure follows the indictment of BitConnect founder Satish Kumbhani and its chief US promoter, Glenn Arcaro. In 2022, a US court sentenced Arcaro to 38 months in prison and ordered him to repay $17.6 million to victims across 40 countries. Kumbhani faces multiple charges, including conspiracy to commit wire fraud, commodity price manipulation, and international money laundering. If convicted on all counts, he could receive a maximum prison sentence of 70 years. However, he remains a fugitive, evading prosecution.