In a major crackdown on cryptocurrency-related financial crimes, the Enforcement Directorate (ED) has seized digital assets valued at ₹1,646 crore in connection with the infamous BitConnect investment fraud. This seizure marks one of the largest confiscations of cryptocurrencies in India, highlighting the growing focus of law enforcement agencies on tackling crypto-based Ponzi schemes.
Apart from the seized cryptocurrencies, the ED also recovered ₹13.5 lakh in cash, a luxury SUV, and several digital devices during extensive raids conducted in Gujarat. The operation is part of an ongoing investigation into the BitConnect scam, which defrauded investors globally by promising extraordinarily high returns.
BitConnect operated between November 2016 and January 2018, attracting thousands of investors with claims of generating profits through a “volatility software trading bot.” Investors were encouraged to deposit funds either in cash or Bitcoin, which were subsequently converted into BitConnect’s own cryptocurrency. The scheme also incorporated a referral-based multi-level marketing structure, rewarding participants for recruiting new investors.
However, investigations have revealed that no actual trading activity took place. Instead, BitConnect operated as a Ponzi scheme, using funds from new investors to pay returns to earlier participants. The platform collapsed in January 2018 following regulatory crackdowns in several countries, leaving many investors with significant losses.
The ED’s probe uncovered complex transaction patterns spread across multiple cryptocurrency wallets, some of which were linked to the dark web, making it challenging to trace the funds. Through meticulous forensic analysis, the agency successfully tracked and seized the digital assets.
In addition to domestic efforts, the ED is collaborating with international law enforcement agencies to identify victims worldwide and facilitate the return of funds. The case also has a significant international dimension, as BitConnect’s founder, Satish Kumbhani, was indicted in the United States in 2022. If convicted, Kumbhani faces up to 70 years in prison for his central role in orchestrating the fraud.
This landmark seizure underscores the ED’s commitment to safeguarding investors and curbing financial crimes in the rapidly evolving cryptocurrency sector.
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