BitConnect founder Satish Kumbhani: Satish Kumbhani, the founder of BitConnect, accused in a $2.4 billion Ponzi scheme in the US, has disappeared from his native country India. The officers told this to a judge in New York.
In September, before the criminal charges were imposed, the US Securities and Exchange Commission filed a case against Kumbhani, claiming he fraudulently raised $2 billion from investors in its cryptocurrency exchange platform. However, on Monday the mystery deepened.
Security and Exchange Commission informed the court
“The 36-year-old is likely to leave India and flee to another country,” Securities and Exchange Commission (SEC) attorney Richard Primoff said in a filing in federal court in Manhattan. Efforts are on to trace Kumbhani by contacting the Financial Regulatory Authority of India since November, he said. However, it is not yet known where he is. The attorney said, 36-year-old Kumbhani appears to have fled India and has taken refuge in some other country. Primof has now sought time from the court till May 30, so that the commission can trace him and bring him to America.
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On Tuesday, the court accepted the request of the SEC.
Arrest can be made if proven guilty
If convicted in the case filed in San Diego on Friday, he could be arrested on arrival in the US and possibly jailed. Kumbhani created BitConnect and the digital token BitConnect Coin in 2016.
Fraud was executed in this way
Kumbhani described Bitconnect as a “lending program” based on his proprietary “trading bot” and “volatility software” that allows trading in the global crypto market.
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The ‘lending program’ allegedly promised investors to ‘produce substantial profits and guaranteed returns’. In fact, the lending program was a Ponzi scheme, raising $2.4 billion from investors around the world, and in January , it was closed in 2018. It is alleged that Kumbhani made small payments to old investors out of new investors’ money and continued with the scheme, thus defrauding billions of dollars through a Ponzi scheme.
Fraud done in many countries including South Korea, Australia
The very next day, a South Korea-based promoter of Kumbhani warned that “some people are talking about suicide here” and that “many Korea investors have put their life’s deposits in it,” said the accused’s lawyer. “We are getting death threats and the coin will be worthless,” wrote an Australian promoter.
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