U.S. Department of Justice Indicts BitConnect Founder in $2,400,000,000 Crypto Scheme

A federal grand jury in San Diego simply indicted the founder of the BitConnect crypto scheme that allegedly defrauded 1000’s of traders in the US and overseas. 

In a statement printed on Friday, the U.S. Department of Justice says that Indian nationwide Satish Kumbhani faces as much as 70 years in jail if discovered responsible of wire fraud, commodity worth manipulation, conspiracy to commit worldwide cash laundering and working an unlicensed cash transmitting enterprise.

BitConnect was marketed as a web-based crypto funding program that makes use of proprietary know-how to generate excessive returns, however US securities regulators declare that the operation is a Ponzi scheme that swindled billions of {dollars} from traders.

“BitConnect operated as a Ponzi scheme by paying earlier BitConnect traders with cash from later traders. In complete, Kumbhani and his co-conspirators obtained roughly $2.4 billion from traders.”

According to the indictment, Kumbhani directed promoters of the lending program to control the value of the BitConnect Coin (BCC) to create an impression that there’s market demand for BitConnect’s digital asset.

The doc additionally says that Kumbhani and his conspirators allegedly hid and relocated traders’ funds by shifting the belongings via internationally-based crypto exchanges utilizing a quantity of cryptocurrency wallets.

In addition, Kumbhani allegedly averted the scrutiny and oversight of BitConnect by not complying with the rules of the monetary business, equivalent to by not registering with the Financial Crimes Enforcement Network (FinCEN) as required by the Bank Secrecy Act.

Says particular agent in cost Ryan L. Korner from the Los Angeles discipline workplace of the Internal Revenue Service Criminal Investigation (IRS-CI),

“As cryptocurrency positive aspects recognition and attracts traders worldwide, alleged fraudsters like Kumbhani are using more and more complicated schemes to defraud traders, oftentimes stealing thousands and thousands of {dollars}.

However, make no mistake, our company will proceed our lengthy custom of following the cash, whether or not bodily or digital, to reveal legal schemes and maintain the fraudsters accountable for his or her unlawful acts of trickery and deceit.”

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