Bitconnect, the cryptocurrency project that gave birth to the above cryptocurrency, is far more interesting than the BCC token which died many years ago.
The U.S. Department of Justice announced Friday that BitConnect founders were indicted for fraud in connection with the most notorious Ponzi scheme in cryptocurrency.
The Drama isn’t Over
According to a Justice Department press release, Satish Kumbhani (36), of Hemal in India was charged with conspiracy, wire fraud and conspiracy to manipulate commodity prices. He also faces wire fraud, conspiracy, wire fraud, conspiracy, to commit money laundering, operation of unlicensed money transmission business and conspiracy to commit international wire fraud.
Bitconnect charges all costs. This service was originally sold as a lending program, but it turned out to be a global pyramid business. It ranked 20th on the list of cryptocurrencies that have the highest market capitalization.
According to the Justice Department, Kumbhani defrauded a large number of investors and raked in nearly $2.4 billion in illgotten funds.
Kumbhani set up a scheme that offered trading bot services and volatility software. He promised that Bitconnect users would earn substantial crypto profits. In reality, customers made money proportional with the number of people who got involved in the business. They were also paid with money from new users, which is typical of a Ponzi scheme.
Eric B. Smith, Special Agent in Charge of FBI’s Cleveland Field Office stated in official statements that Bitconnect was an example of how fraudsters enter the world of cryptocurrency looking to evade law.
“Today’s indictment reaffirms the FBI’s commitment to identifying bad actors defrauding investors, and sullying legitimate entrepreneurs’ ability to innovate in the emerging cryptocurrency space. The FBI will continue to investigate and prosecute fraudsters, no matter how twisted or disguised it may be.
Bitconnect is also a history of the SEC
Cryptopotato reported that the U.S. authorities are actively investigating the case and hunting down all those involved. They also seek to seize as many dollars as possible. Five individuals connected to BitConnect were sued by the United States Securities and Exchange Commission in May 2021. Satish Kumbhani wasn’t on the list.
The SEC reached an agreement with the three defendants, receiving more than $12,000,000 in BTC and fiat currencies in penalties.
Late last year, the SEC brought a judgment against Glenn Arcaro’s company Future Money for violating the Securities Act.
Marla Brooks – Financial Analysis
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