The United States Department of Justice (DOJ) has charged Satishkumar Kurjibhai Kumbhani for using the infamous BitConnect crypto platform to conduct a fraudulent act.
DOJ Indicts BitConnect’s Founder
“This indictment alleges a massive cryptocurrency scheme that defrauded investors of more than $2 billion. The U.S. Attorney’s Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud,” U.S. Attorney Randy Grossman said.
According to the DOJ, Kumbhani, who is an Indian citizen, conspired with other individuals to defraud investors of over $2 billion. It is believed to be the biggest cryptocurrency fraud ever charged.
The court alleges that BitConnect misled investors by using its “Lending Program,” which it claims uses proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” saying it generates huge profits and returns. Meanwhile, in reality BitConnect was merely used in promoting a Ponzi scheme, in which new investors’ funds were used to pay the earlier investors.
Kumbhani was also charged in a separate conspiracy to manipulate the price of BitConnect’s token, dubbed BCC, that resulted in increased demand for the cryptocurrency.
The DOJ also charged the BitConnect founder with operating an unlicensed money transmitting business alongside his involvement in a money laundering conspiracy involving the transfer of Bitcoin (BTC) and BCC to investors and crypto purchasers with funds realized from the alleged fraud.
BitConnect’s Director and Promoter Pleads Guilty
The charges follow Glenn Arcaro’s guilty plea last September for his involvement in the alleged scheme. Arcaro, 44, was the director and promoter of BitConnect. He risks spending up to 20 years in prison when he is sentenced 0n May 6, 2022.
Meanwhile, the DOJ has called on victims of BitConnect to identify themselves, sharing a link to where an impact statement can be submitted.
“All investor victims of BitConnect fraud are encouraged to visit the following webpage – https://www.justice.gov/usao-sdca/us-v-glenn-arcaro-21cr02542-twr for information on their rights as a victim, the ability to submit a victim impact statement, and to identify themselves as a potential victim.”
Crypto Scam on the Rise
As the cryptocurrency industry continues to grow and gain mainstream adoption, bad players have turned it into a playground for their nefarious activities.
Crypto scams and frauds keep rising and seem to be unending. Earlier this month, Coinfomania reported that seven executives of fraudulent crypto exchange V Global were charged in $1.7 billion crypto fraud.
