As Indian Prime Minister Narendra Modi met former US President Donald Trump, the Enforcement Directorate (ED) in Ahmedabad seized cryptocurrency worth approximately ₹1,646 crore in connection with the BitConnect scam, involving key figures Satish Kumbhani, Divyesh Darji, and others. The seized assets, deemed proceeds of crime, were confiscated under the Prevention of Money Laundering Act (PMLA), 2002.
Largest Crypto Fraud in History
The US Department of Justice (DOJ) has accused Satish Kumbhani, an Indian national and the founder of the BitConnect cryptocurrency investment platform, along with Glenn Arcaro, the platform’s director, of orchestrating a large-scale Ponzi scheme. According to the DOJ, investors were defrauded of approximately $2.4 billion, making it one of the biggest cryptocurrency frauds in history. Kumbhani remains a wanted fugitive in US courts.
A spokesperson for the US Attorney’s Office stated, “The BitConnect scheme is considered the largest cryptocurrency scam to date.”
Investigation Findings
The ED launched its PMLA investigation based on an FIR registered by CID, Crime, Surat. The investigation revealed that the accused fraudulently acquired these cryptocurrencies through deceptive investment schemes rather than legitimate income sources.
Between November 2016 and January 2018, the accused established an unregistered and fraudulent investment scheme through BitConnect’s so-called “Lending Program”. The scheme promised high returns on investment, targeting investors in India and across the world with false promises.
False Promises and Fake Profits
BitConnect’s founder and promoters lured investors with exaggerated profit claims on their website, promising a 3,700% annual return. However, the ED’s investigation confirmed that no real trading activity ever took place.
During multiple search operations, ED recovered digital devices storing cryptocurrency and transferred them to its cold wallets, securing them as part of the seizure. Previously, the ED had also seized ₹489 crore in movable and immovable assets linked to the scam. The case’s international scope has also drawn attention from US authorities.
International Investigations and Legal Action
Reports indicate that foreign nationals were among those who invested in BitConnect, and Satish Kumbhani remains under investigation in the United States. Alongside Kumbhani, Glenn Arcaro, a US citizen and a key promoter of BitConnect, was found guilty of defrauding global investors. A US court ordered Arcaro to repay $17.6 million in compensation to 800 victims from 40 countries.
The ED continues its investigation into the BitConnect scam, working alongside international agencies to track fraudulent transactions and recover misused assets. Authorities remain committed to bringing justice to the victims of this historic crypto fraud.
