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The coin exchange owner fled after stealing $2.4 billion

The US Department of Justice says the founder of the BitConnect cryptocurrency project has gone into hiding after being accused of orchestrating a Ponzi scheme.

According to the US Department of Justice, Satish Kumbhani, the founder of BitConnect, has fled India. Mr Kumbhani was charged with organizing a global Ponzi scheme totaling up to 2.4 billion dollars.

The Bitconnect founder was sued by the US Securities and Exchange Commission in September 2021.

“Mr. Kumbhani is likely to have moved to an unknown address abroad,” attorney Richard Primoff said SEC according to the court documents.

BitConnect founder Satish Kumbhani. Photo: Bloomberg.

“Since Nov. SEC consulted with Indian financial regulators to trace Kumbhani’s whereabouts. However, his whereabouts are currently undetermined,” the lawyer added.

Kumbhani was charged with wire fraud, operating an unlicensed money transfer business and three conspiracies: electronic fraud; manipulate commodity prices; and international money laundering.

Primoff asked Judge John Koeltl to extend the trial to May 30.

If Kumbhani flees to the United States, he could be arrested and possibly jailed if convicted in an indictment filed Feb. 25 in San Diego.

Satish Kumbhani, 36, promoted BitConnect’s cryptocurrency “lending program” to investors, claiming to have proprietary technology that allows investors excellent returns.

However, as alleged in the indictment, BitConnect functioned as a Ponzi scheme by paying initial BitConnect investors with funds from later investors. BitConnect was triggered 2.4 billion dollars from investors around the world ahead of closing in January 2018,” the Justice Department said.

According to the indictment, one of Kumbhani’s Korea-based promoters warned the next day that some people here were talking of suicide and that many Korean investors had invested everything they had.

In September 2021, Glenn Arcaro, BitConnect’s top promoter in North America, pleaded guilty. In November, prosecutors said they were about to sell 57 million dollars Cryptocurrencies confiscated by Arcaro. This month, a judge approved an amended order for the sale.

Kumbhani and his accomplices earned about 2.4 billion dollars in the above scam.

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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.