Indian founder of BitConnect, Satish Kumbhani, was indicted by the US Department of Justice (DoJ) in February for “orchestrating” a $2.4 billion global crypto Ponzi scheme and was believed to be hiding in India, he is now wanted in India, too!
On August 16, a Pune-based lawyer filed a complaint with the local police alleging that Kumbhani and six of his accomplices defrauded him of nearly 220 BTC, which is worth about INR 42 crore ($5.2 million) at current price levels.
According to the First Information Report (FIR), the unnamed lawyer bought 54 BTC for INR 49 lakh in 2016 and was told he would get another 166 BTC for his investments in BitConnect. But Kumbhani and his accomplices made him reinvest the BTC in different Ponzi schemes between 2016 and 2021 before they ultimately shut their operations and vanished.
Following the complaint, the Pune Police have launched an investigation, but no arrests have been made in the case so far.
As many of the victims of BitConnect were US citizens, several US investigating agencies were involved in the probe against Kumbhani, and they believed that he was hiding in India. But after the BTC fraud case registration, Indian police are expected to launch a search for him.
In a press release on February 25, the DoJ noted, “BitConnect is an alleged fraudulent cryptocurrency investment platform that reached a peak market capitalization of $3.4 billion.”
Given the popularity of cryptocurrencies and the lack of trading information, many people fall prey to dubious middlemen and their schemes, resulting in crypto fraud cases frequently reported in India.
In March, ZyCrypto reported the arrest of a man for cheating several people to the tune of $200,000 in Mumbai. The accused, Jagdish Laadi, promised a 25% return on BTC investments within a week and similar gains going forward.
But the victims of the fraud found him not responding to their calls after a few weeks when neither the promised 25% returns nor the invested money was coming through. They filed a complaint with the police, and Laddi was arrested.
This was one of the many crypto-related fraud cases in India over the last year. Many involve a much more significant amount of money and several times more victims. What makes the matter complicated is the absence of proper laws to deal with these cases.
Right now, they are dealing with either criminal or financial crime laws. In many cases, crypto frauds are possible only because there are no agencies to register, rate, or regulate crypto firms and investors have no access to authentic and credible information.
While India has started taxing crypto transactions and profits, it has still not enacted crypto regulations.