India's Directorate of Enforcement (ED) in Ahmedabad seized cryptocurrencies valued at approximately $198 million as part of an ongoing investigation into the Bitconnect cryptocurrency fraud.
The seizure occurred during search operations conducted on February 11 and February 15 under the Prevention of Money-Laundering Act (PMLA), 2002. Alongside the digital currencies, authorities also confiscated cash amounting to Rs.13,50,500, a Lexus car, and various digital devices.
The ED's action is rooted in First Information Reports (FIRs) filed by the Crime Investigation Department (CID) in Surat, which led to the discovery of a fraudulent "Lending Program" operated by Bitconnect from November 2016 to January 2018. The scheme promised substantial returns to investors worldwide, including those in India, through a purported "volatility software trading bot."
Officials have revealed that the accused individuals did not invest the collected funds as promised. Instead, they funneled the money into digital wallets they controlled. The ED's thorough investigation, involving tracking numerous web wallets and ground intelligence, enabled the identification and seizure of the wallets and digital devices containing the cryptocurrencies.
Bitconnect's operations came to a halt in early 2018 after it was outed as a Ponzi scheme. In the United States, Bitconnect's founder and top promoters face charges of conspiracy to commit wire fraud and money laundering. Glenn Arcaro, the lead promoter in the U.S., received a 38-month prison sentence and was ordered to repay victims over $17 million.
The founder, Satish Kumbhani, was indicted in February 2022, but his current location is unknown. Authorities globally are working to recover assets and bring those involved in the $2.4 billion cryptocurrency fraud to justice.
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