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<keyword id="6573470" type="General" weightage="20" keywordseo="Satish-Kumbhani" source="Orion">Satish Kumbhani</keyword>, founder of cryptocurrency platform BitConnect who has been indicted in the US for running a $2.4 billion <keyword id="13198918" type="General" weightage="20" keywordseo="crypto-ponzi-scheme" source="Orion">crypto ponzi scheme</keyword>, has likely "relocated from India to an unknown location" abroad. A federal grand jury in San Diego last week indicted Kumbhani with orchestrating a global Ponzi scheme. BitConnect is an alleged fraudulent cryptocurrency investment platform that reached a peak market capitalisation of $3.4 billion. In total, Kumbhani, facing 70 years in prison if convicted, and his co-conspirators obtained approximately $2.4 billion from investors. In a latest filing in the US Securities and Exchange Commission (SEC), Senior Trial Counsel Richard Primoff said that since November, "the commission has been consulting with that country's (India's) financial regulatory authorities in an attempt to locate Kumbhani's address. At present, however, Kumbhani's location remains unknown". Kumbhani, 36, "has likely relocated from India to an unknown address in a foreign country", Primoff said in a court filing late on Monday. While Kumbhani was charged criminally by the US Department of Justice, the SEC separately sued Kumbhani in September 2021, claiming he fraudulently raised more than $2 billion for BitConnect. Primoff has now asked US District Judge for an extension until May 30 so that the "Commission may complete its investigation into their current whereabouts and, if it locates them within the United States, serve them in a timely fashion". "The Commission did not know the whereabouts of Kumbhani, an Indian citizen, at the time it filed this action, and BitConnect is an unincorporated entity the Commission must serve through its manager, Kumbhani," said Primoff in the filing. According to court documents, Kumbhani misled investors about BitConnect's "Lending Programme." Under this programme, Kumbhani and his co-conspirators touted BitConnect's purported proprietary technology, known as the "BitConnect Trading Bot" and "Volatility Software", as being able to generate substantial profits and guaranteed returns by using investors' money to trade on the volatility of cryptocurrency exchange markets. The indictment further alleged that, after operating for approximately one year, Kumbhani abruptly shut down the Lending Programme. Kumbhani then directed his network of promoters to fraudulently manipulate and prop up the price of BitConnect's digital currency, a commodity known as BitConnect Coin (BCC), to create the false appearance of legitimate market demand for BCC. "Kumbhani and his co-conspirators also concealed the location and control of the fraud proceeds obtained from investors by commingling, cycling, and exchanging the funds through BitConnect's cluster of cryptocurrency wallets and various internationally based cryptocurrency exchanges," according to US Department of Justice. "As cryptocurrency gains popularity and attracts investors worldwide, alleged fraudsters like Kumbhani are utilising increasingly complex schemes to defraud investors, oftentimes stealing millions of dollars,a said Ryan L. Korner, Special Agent in Charge, of the IRS Criminal Investigation's (IRS-CI) Los Angeles Field Office. Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 70 years in prison. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/business/startups/news/swiggy-dunzo-zepto-and-grofers-should-roll-back-10-minute-delivery-says-petition/articleshow/89900739.cms">A netizen is seeking roll back of the 10 minute delivery feature on Swiggy, Dunzo, Zepto and Grofers</a> <a href="https://www.businessinsider.in/stock-market/news/as-long-as-mukesh-ambani-is-there-to-rescue-the-market-doesnt-care-about-future-retails-financial-stress/articleshow/89886569.cms">As long as Mukesh Ambani is there to rescue, the market doesn't care about Future Retail's financial stress</a> <a href="https://www.businessinsider.in/india/news/indian-economy-grows-by-5-4-in-oct-dec-lower-than-8-5-in-the-previous-quarter/articleshow/89898660.cms">Indian economy's growth slows down to 5.4% between October to December</a>

Indian founder on the run in global $2.4 billion crypto ponzi scheme

<ul class="summary-list"><li><keyword id="11909666" type="UNKNOWN" weightage="60" keywordseo="bitconnect" source="Orion">BitConnect</keyword>'s founder has been charged with orchestrating a global $2.4 billion <keyword id="11948398" type="UNKNOWN" weightage="60" keywordseo="ponzi-scheme" source="Orion">Ponzi scheme</keyword>, the Justice Department said.</li><li>Satish Kumbhani faces several charges including wire <keyword id="11893299" type="UNKNOWN" weightage="60" keywordseo="fraud" source="Orion">fraud</keyword>, the DOJ said Friday.</li></ul>The founder of the now-obsolete cryptocurrency exchange BitConnect has been charged with organizing a $2.4 billion Ponzi scheme after a San Diego grand jury returned an indictment, according to a <a href="https://www.justice.gov/opa/pr/bitconnect-founder-indicted-global-24-billion-cryptocurrency-scheme">statement</a> from the Department of Justice on Friday. Satish Kumbhani founded BitConnect in 2016 and had previously been accused of securities fraud by the Securities and Exchange Commission for the misuse of <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> raised from global investors. He is now charged with a litany offenses, which are punishable by up to 70 years in prison."Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering," the DOJ said.Kumbhani remains at large, according to the DOJ. Insider has reached out to Kumbhani for comment.The DOJ said 36-year old Kumbhani misled investors in BitConnect's 'Lending Program', in which users traded in their bitcoin for BitConnect's own coin. This then locked the value of the coin for a set amount of time and in turn they received daily interest payments. The DOJ said Kumbhani and his co-conspirators touted the benefits of BitConnect's 'Trading Bot' and its 'Volatility Software', claiming it was able to generate profits and guarantee returns by trading on the volatility of cryptocurrency <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>. According to the indictment, BitConnect operated as a Ponzi scheme in reality, where early investors were paid with money received from new investors, rather than through the returns generated by the 'Lending Program'.The indictment says Kumbhani closed the Lending Program after a year and told his network of promoters to fraudulently manipulate and prop up the price of BitConnect's bcc coin to give the appearance of demand for the token. <a href="https://www.businessinsider.com/bitconnect-to-shut-down-2018-1?utm_medium=ingest&amp;utm_source=markets">BitConnect shut down</a> in January 2018, just two weeks after the Texas State Securities board issued a cease and desist order. Bitcoin was trading around $15,000 at that time, according to CoinMarketCap.In the years since, the SEC and the US Department of Justice have pursued the case, with the three promoters of the Lending Program agreeing to pay <a href="https://markets.businessinsider.com/news/currencies/bitconnect-promoters-settle-sec-crypto-lending-regulators-scheme-2021-8?utm_medium=ingest&amp;utm_source=markets">$3.5 million to settle charges</a> with the SEC last August.<ul><li>Read more: <a href="https://www.businessinsider.com/investing-strategies-hawkish-fed-tight-money-policy-russia-ukraine-invasion-2022-2?r=US&amp;IR=T" target="_blank" rel="noopener noreferrer">A Wall Street veteran weighs in on why escalating Russia-Ukraine tensions are unlikely to delay the Fed's hawkish campaign to raise rates — and shares 3 commodity-based strategies to leverage in this environment</a></li></ul>

Founder of now-defunct BitConnect has been indicted for a $2.4 billion crypto Ponzi scheme.

<ul><li>The <keyword id="11898795" type="UNKNOWN" weightage="60" keywordseo="sec" source="Orion">SEC</keyword> sued the founder of <keyword id="11909666" type="UNKNOWN" weightage="60" keywordseo="bitconnect" source="Orion">BitConnect</keyword> on Wednesday alleging a $2 billion <keyword id="11909667" type="UNKNOWN" weightage="60" keywordseo="crypto-fraud" source="Orion">crypto fraud</keyword>.</li><li>Satish Kumbhani is accused of improperly selling securities in January 2017.</li><li>BitConnect falsely told investors it could generate monthly returns as high as 40%, according to the SEC.</li><li><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</li></ul>The SEC sued the founder of BitConnect on Wednesday for an alleged $2 billion <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> fraud, according to court filings first <a href="https://news.bloomberglaw.com/securities-law/sec-sues-bitconnect-founder-for-2-billion-crypto-scheme">reported on by Bloomberg Law.</a>Satish Kumbhani is accused by the SEC of improperly selling securities, raising $2 billion from investors in an offering that wasn't properly registered with regulators. The security raise occurred in January of 2017. According to the SEC, Kumbhani and Glenn Arcaro, a promoter, improperly sold securities tied to BitConnect's purported "lending program" throughout 2017. The defendants falsely told investors that it could generate monthly returns as high as 40% with its "volatility software <keyword id="6368158" type="UNKNOWN" weightage="60" keywordseo="trading" source="Orion">trading</keyword> bot," according to the complaint.The SEC alleges no such trading strategy existed. In May, the SEC sued five promoters tied to BitConnect that pushed the scheme by creating testimonials on YouTube. The promoters were awarded commissions based on their success in attracting new investors. According to the SEC, Arcaro received more than $24 million in referral commissions. The promoters <a href="https://markets.businessinsider.com/news/currencies/bitconnect-promoters-settle-sec-crypto-lending-regulators-scheme-2021-8">paid 190 bitcoin and $3.5 million</a> to the SEC to settle the charges.BitConnects <a href="https://www.businessinsider.com/bitconnect-to-shut-down-2018-1?utm_source=markets&amp;utm_medium=ingestgest">folded in 2018</a> after it received cease and desist letters for the unauthorized sale of securities and being the victim of DOS cyber attacks.

SEC sues BitConnect founder for alleged $2 billion crypto fraud

<ul class="summary-list"><li>The <keyword id="12554578" type="UNKNOWN" weightage="60" keywordseo="us-justice-department" source="Orion">US Justice Department</keyword> is selling $56 million worth of cryptocurrency seized from <keyword id="11909666" type="UNKNOWN" weightage="60" keywordseo="bitconnect" source="Orion">BitConnect</keyword>'s top promoter.</li><li>The proceeds from the sale will be put toward paying back victims of the BitConnect scam. </li></ul>Victims of the biggest heist in the cryptocurrency world may soon get some retribution. That's because the US Justice Department is selling $56 million worth of cryptocurrency it seized as part of its case against BitConnect, according to a <a href="https://www.justice.gov/opa/pr/56-million-seized-cryptocurrency-being-sold-first-step-compensate-victims-bitconnect-fraud">Tuesday press release</a>. The founder of BitConnect, a scam cryptocurrency, and its promoters swindled thousands of people out of $2 billion worth of <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> in 2017.The scheme is the largest cryptocurrency fraud ever criminally charged, the Justice Department said in its statement. The proceeds from the sale will be used to help pay back victims of the scam. The <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> to be sold was seized from BitConnect's top promoter, 44-year-old Glenn Arcaro, who pleaded guilty in federal criminal court for his role in the case. <a href="https://markets.businessinsider.com/news/currencies/sec-sues-bitconnect-founder-for-alleged-2-billion-crypto-fraud-2021-9">Insider previously reported</a> that he and BitConnect founder Satish Kumbhani told investors the coin could get monthly returns as high as 40%. In September, the US Securities and Exchange Commission sued Kumbhani for raising $2 billion from investors in an offering not properly registered with regulators. In May, the SEC <a href="https://www.businessinsider.in/cryptocurrency/news/us-regulator-sec-sues-five-bitconnect-promoters-in-a-2-billion-crypto-trading-ponzi-scheme/articleshow/83113886.cms">sued five BitConnect promoters</a> who created video testimonials on YouTube and received commissions from it. Arcaro, for his part, received $24 million in referral comissions, Insider said previously. Experts have been advising investors to <a href="https://www.businessinsider.com/crypto-investing-strategy-scam-kim-kardashian-ethereum-max-2021-9">remain vigilant</a> in the crypto world. As the popularity of cryptocurrencies rises, so does the number of scams. Insider reported in July one 77-year-old woman lost more than $12,000 in a bitcoin scam. She's <a href="https://www.businessinsider.com/bitcoin-scam-robs-woman-cryptocurrency-fraud-cases-surge-2021-7">one of many</a> who has been swindled out of money. More recently, the makers of the <a href="https://markets.businessinsider.com/news/currencies/the-squid-game-token-scam-website-socials-offline-coingecko-crypto-2021-11">Squid Game coin</a> named after the hit Netflix show made millions after investors caused the meme coin price to skyrocket. The scammers <a href="https://www.businessinsider.in/cryptocurrency/news/squid-game-cryptocurrency-trading-at-to-0-scammers-make-2-1-million/articleshow/87479063.cms">reaped the rewards</a> before the crypto project was taken offline.

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Indian founder on the run in global $2.4 billion crypto ponzi scheme

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Founder of now-defunct BitConnect has been indicted for a $2.4 billion crypto Ponzi scheme.

Adam Morgan McCarthy

SEC sues BitConnect founder for alleged $2 billion crypto fraud

Matthew Fox

The US Justice Department is selling $56 million worth of crypto seized in massive bitcoin investment fraud case

Natasha Dailey

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