US Charges Indian Citizen in $3.4 Billion Crypto Ponzi Scheme Bitconnect – The founder of the $3.4 billion crypto Ponzi scheme Bitconnect has just been charged in the United States. “If convicted of all charges, he faces a possible total sentence of 70 years in jail,” according to the US Department of Justice.
According to the DOJ, “Bitconnect is an apparently fraudulent bitcoin investment platform that has a market valuation of $3.4 billion.”
Satishkumar Kurjibhai Kumbhani, an Indian citizen and resident, was charged with various offenses by a federal grand jury for his alleged role in a major criminal conspiracy involving the cryptocurrency startup he established, Bitconnect.
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According to the justice department, the 36-year-old from Hemal, India, misled investors by claiming that the scheme’s “Lending Program” could “produce huge profits and assured returns” by employing “Bitconnect Trading Bot” and “Volatility Software.”
On the other hand, the Department of Justice stated:
Bitconnect was a Ponzi scheme in which money from later Bitconnect investors was used to pay out money to early Bitconnect investors. Kumbhani and his associates were able to raise $2.4 billion in total from investors.
According to the indictment, Kumbhani abruptly closed down the Lending Program after nearly a year. “He then directed his network of promoters to falsely manipulate and raise the price of BitConnect’s digital currency, a commodity called Bitconnect Coin (BCC),” according to the DOJ.
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US Charges Indian Citizen in $3.4 Billion Crypto Ponzi Scheme Bitconnect – “Kumbhani is charged with conspiracy to commit commodities price manipulation, conspiracy to commit wire fraud, conspiracy to participate in international money laundering, and operating an unregistered money transmitting business,” according to the Justice Department.
If convicted on all charges, he faces a maximum sentence of 70 years in jail.