News of cryptocurrency funding fraud has hit the group once more, as authorities of two U.S. states, Illinois and Arizona, have requested the Criminal Investigation Department (CID) in India to seize the property of a number of BitConnect promoters, per stories from the Times of India.
BitConnect was an open-source cryptocurrency and an funding program accused of working a Ponzi scheme earlier than ceasing operations in January of this 12 months.
The CID crime investigators assigned to the case reported that they’ve since discovered that the alleged suspects, Satish Kumbhani and Divyesh Darji, two native promoters of BitConnect, started their cryptocurrency-based funding in Dec. 2016, following demonetization, and efficiently lured in lots of traders by promising an unrealistic 365% return every year on investments.
The traders have been made to trade their bitcoins with BitConnect cash, which they have been informed might yield curiosity. Bhatt has additionally been implicated within the case.
It was confirmed as a rip-off when the crew shut down the BCC crypto trade and investing platform after being served a cease and desist letter from Texas regulators, declaring an ICO shortly beforehand as a final ditch effort to squeeze more cash out of customers earlier than exit scamming with the tens of millions already invested.
A CID crime investigator additionally reported that:
“At the time, one BitConnect coin was worth about $360, and people invested their Bitcoins due to the attractive returns promised. While Darji was arrested from the Delhi airport on his way back from Dubai, Kumbhani is still absconding.”
The U.S. states of Illinois and Arizona are actually asking the investigating authorities in India to seize the property of the promoters who defrauded traders of Rs 41,000 crore (round $5.6 billion). Most of the funds have been purportedly poured into the agency after the demonetization of high-value banknotes on the route of the Modi administration in 2014.
The CID additionally claims that some of the traders are “suspected of laundering black money” and they’d be probed by the enforcement directorate and revenue tax authorities.
Following the sudden cessation of actions on the platform, many traders have discovered it tough to redeem or commerce their BitConnect holdings. American customers have additionally launched a class action lawsuit towards the corporate, which alleges that the BitConnect tokens weren’t registered securities and are actually searching for compensation for misplaced funds.
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