Home News SEC unable to locate BitConnect founder convicted in $2.4B fraud case

SEC unable to locate BitConnect founder convicted in $2.4B fraud case


Satish Kumbhani, the founder of BitConnect, indicted by the US Department of Justice in a $2.4 billion Ponzi scam and has since vanished.

The Securities and Exchange Commission stated in a court statement on Monday that Kumbhani’s whereabouts are still unknown. Kumbhani’s last known whereabouts, according to the SEC, was in his native India, but he vanished since the promoter of his BitConnect Ponzi scheme charged by the SEC with defrauding American investors of more than $2 billion.

The SEC stated in its statement that the convicted founder has most likely fled to another country and that “Kumbhani’s location remains unknown, and the Commission is unable to determine when, if at all, its efforts to locate him will be successful”. Wire fraud, operating an unregistered money transmission business, and three conspiracies: wire fraud, commodity price manipulation, and international money laundering are among the charges against the creator.

The BitConnect saga stretches back to the ICO era. When it was one of the most well publicised and discussed enterprises. Since its inception in 2016, the crypto project has gathered billions of dollars from global investors. Making it a global sensation by mid-2017. The project claimed a loan scheme based on proprietary “trading bots” and “volatility software” that would reward investors with a 10% return on their BCC token investment.

In December 2017, Bitconnect’s native token BCC hit an all-time high

The Department of Justice charged Kumbhani with operating a Ponzi scheme through BitConnect’s loan business. Which managed to defraud investors of $2.4 billion. At the height of the market frenzy in December 2017, Bitconnect’s native token BCC hit an all-time high trading price of $463.31. Valuing the company at $3.4 billion.

By January 2018, the project’s founders had yanked the rug out from under it. Leading the token price to plummet to near zero and investors to lose a significant amount of money.

BitConnect (BCC) price history. Source: CoinMarketCap

The DOJ likewise blamed Kumbhani for spurring counterfeit market interest for BCC to bait additional clueless financial backers. The undertaking like numerous others in the ICO period ended up being a huge fraudulent business model. Where the makers utilized early assets to take care of old financial backers. And later pursued away gathering billions in view of promotion and ICO frenzy. A few advertisers of the task across Australia and the U.S. have as of now been indicted and confronting prison.

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