YEREVAN (CoinChapter.com) — Indian authorities have confiscated ₹1,646 crore ($190 million) in cryptocurrency linked to the BitConnect Ponzi scheme. The Enforcement Directorate (ED), Ahmedabad, carried out the operation under the Prevention of Money Laundering Act (PMLA), 2002. Officials also seized ₹13,50,500 ($15,582) in cash, a luxury vehicle, and electronic devices during raids in Gujarat on Feb. 11 and 15. The investigation followed First Information Reports (FIRs) filed by the Crime Investigation Department (CID) in Surat.
Authorities suspect BitConnect defrauded over 4,000 investors across 95 countries, causing $2.4 billion in losses. Investigators are working to track crypto wallets and transactions to recover additional assets.
BitConnect’s Promises of High Returns Led to a Global Crypto Fraud
BitConnect, which launched in 2016, claimed to operate a crypto lending program that used a volatility software trading bot to generate high returns. Promoters advertised 1% daily profits, reaching an annual return of 3,700%. Investors were encouraged to deposit funds in Bitcoin or cash, believing the scheme could generate massive profits.
The ED’s investigation found that BitConnect did not invest user funds in trading, despite its claims. Instead, its operators transferred funds to personal wallets, creating an illusion of profitability by reporting fictitious earnings. The scheme eventually collapsed in 2018, leading to widespread financial losses.
Officials uncovered evidence that many crypto transactions were processed through the dark web, making it difficult to trace the movement of digital assets. Despite these obstacles, investigators used transaction records and intelligence gathering to locate crypto wallets linked to key individuals.
BitConnect Founder and Promoters Face Legal Action
Moreover, authorities found that the BitConnect Ponzi scheme relied on a network of promoters who received commissions for recruiting new investors. The scheme’s founder, Satish Kumbhani, was charged in the United States in 2022 with wire fraud, commodity price manipulation, and money laundering. He remains a fugitive and could face up to 70 years in prison if convicted.
BitConnect’s top U.S. promoter, Glenn Arcaro, was sentenced to 38 months in prison and ordered to return $17.6 million to victims.
The ED has also seized ₹489 crore ($59 million) in assets related to the case. Authorities are investigating foreign nationals and Indian promoters who were involved in the cryptocurrency fraud and are working to trace digital assets and additional crypto wallets.
Victims of the BitConnect Ponzi Scheme Took Extreme Measures
Some investors went to extreme lengths to recover their losses. In August 2024, the ED revealed that Shailesh Babulal Bhatt, an investor in BitConnect Coin (BCC), allegedly kidnapped two BitConnect employees in an attempt to reclaim his funds. According to authorities, Bhatt extorted 2,091 Bitcoin (BTC), 11,000 Litecoin (LTC), and ₹145 million ($1.7 million) from them. Officials stated that his actions were a direct response to the frustration and financial losses he suffered due to the BitConnect Ponzi scheme.
Crypto Fraud Investigations Continue as Authorities Track Hidden Assets
Additionally, the ED is continuing efforts to trace digital assets and analyze crypto transactions to recover more funds. Investigators are examining transaction records and intelligence reports to identify hidden crypto wallets tied to the BitConnect Ponzi scheme.
Notably, the FBI’s Operation Level Up recently reported that it prevented $285 million in potential crypto fraud losses between January 2024 and January 2025. Moreover, authorities in India and the U.S. are coordinating efforts to hold BitConnect promoters accountable and recover funds linked to the cryptocurrency fraud investigation. The case remains active, with officials working to track additional cryptocurrency and financial networks connected to the scheme.
