Key Insights:
- The 2017 BitConnect Ponzi scheme founder Satish Kumbhani has been reported unlocatable.
- The Department of Justice recently indicted him for defrauding investors of $2.4 billion using a Ponzi scheme.
- The Security and Exchange Commission also requested a 90-day extension to locate the Kumbhani.
While the arrival of crypto brought new financial capabilities to individuals, it also brought age-old scammers and defrauders.
One such defrauder Satish Kumbhani was recently indicted for the $2.4 billion Ponzi scheme he ran. However, he was failed to be located by the Security and Exchange Commission (SEC).
BitConnect – The Scam Scheme
Back in 2017, when crypto was relatively new to people worldwide, an Indian scammer Satish Kumbhani took advantage of people’s naivety.
The man ran a lending program that offered investors up to 10% earnings via the BCC token. However, Kumbhani used newer investors’ money to pay back the older investors.
He continued doing this until Bitconnect peaked in December 2017, touching a market cap of $3.4 billion.
A month later, Kumbhani shut the project down and absconded with the investors’ $2.4 billion.
Finally, four years after the incident, the Department of Justice indicted him on February 25 for running the Ponzi Scheme.
The DOJ stated in the press release:
“Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 70 years in prison.”
Founder Goes Missing
Yesterday, the SEC stated that Kumbhani could not be located in a court filing. However, in the filing, they mentioned:
“In October 2021, the Commission learned that Kumbhani has likely relocated from India to an unknown address in a different foreign country. Since November, the Commission has been consulting with that country’s financial regulatory authorities to locate Kumbhani’s address. At present, however, Kumbhani’s location remains unknown, and the Commission remains unable to state when its efforts to find him will be successful, if at all.
However, in the same filing, the Commission requested the court to grant them a 90-day extension to find Kumbhani if he’s located in the United States. This would give them time to locate him until May 30, 2022.
Recently FXEmpire reported on the growing scams and their detections by authorities and people.
Last week the Indian police arrested 11 individuals for defrauding 2000 people of $5.4 million.
Similarly, yesterday PeckShieldAlert informed about a potential $10 million Shiba Inu namesake scam token.
ShibaTron code blocked investors of the ShibaTron token from withdrawing SHIBT tokens unless their accounts were whitelisted.