India Urged To Take Legal Action Against BitConnect Bosses
Authorities in India have already identified the promoters behind the scam.
Indian government agencies have been urged to confiscate property owned by a number of BitConnect backers. Media reports indicate that states of Illinois and Arizona are calling on Indian investigations docket to take over the assets due to fraud allegations against the promoters.
This is after Bitconnect was accused of operating a Ponzi scheme and later halting business early this year. Bitconnect was a cryptocurrency investment initiative that was open sourced.
Already, Indian crime investigators have identified the suspects in the case. They include; Satish Kumbhani and Divyesh Darji. The two launched their operations in India back in 2016 after a demonetization campaign. They later earned the trust of clients after promising that they will get about 365% as returns based on their initial investments.
Under the scheme, clients swapped their bitcoins with BitConnect coins that were supposed to return interest. Additionally, Bhatt’s names have also been dragged into the case.
It later emerged that the investment was worthless after Bitconnect closed its BBC exchange account moments after being issued with cease and desist statement from authorities in Texas. As a means of mincing extra money from investors, the BitConnect team declared the model as an ICO before quitting the market. At this point, clients had pumped in millions already.
Already Darji is behind bars. During the height of the scam, a single BitConnect crypto was valued at $360. Individuals invested in the program due to promises they were given.
Investors and Money Laundering
American clients from the two states are believed to have invested about $5.6 billion. The Americans now want Indian agencies to immediately seize the property of all involved individuals. Reports indicate that more investors came on board after demonetization of banknotes by the Indian government.
Additionally, investors are believed to have been using the platform to carry out money laundering. The CID seeks to bring on board income tax authorities.
With the fraud allegations, investors are finding it hard to exchange their BitConnect assets. At the same time, American investors have already filed a lawsuit seeking compensation from the firm.