Sometime this week, the authorities of two United States states have purportedly asked official in India to seize the property of the promoters of Bitconnect. The authorities in India have already arrested one of the promoters and the investigators are tracking down another who supposedly handled the worldwide operations of the company and may have a large amount of BTC that belongs to investors.
The authorities of the US states of Illinois and Arizona wrote to India’s Criminal Investigation Department (CID) officials in the state of Gujarat “asking them to seize the property of the promoters of a cryptocurrency investment firm, Bitconnect.” This was reported this past Tuesday by the Times of India. The promoters are “suspected to have made off with Rs 41,000 crore [$5.66 billion] of investors’ money.” The news outlet wrote and cited a CID official stating “Authorities of the US states of Illinois and Arizona wrote to us asking us to seize the property of the promoters of Bitconnect, as citizens of these states have invested in the company and lost money.”
The CID investigators noted that the two Bitconnect promoters, namely Satish Kumbhani and Divyesh Darji, launched their crypto operations in December of 2016, after the country’s demonetization. The publication explained that investors transferred their BTC t the firm and “were issued bitconnect coins in return, which they could trade and on which they received interest.” Also “the promoters lured in thousands of investors by promising 800% returns per annum on investments.”
The CID official detailed that Mr. Darji made a commission of 10% on investments he bought in. The news outlet reported that “He was fluent in English and ran several social welfare programmes. He had a big following and Kumbhani hence roped him in.” Additionally, “Darji had brought in investments of Rs 4,100 crore [$566 million] while the total amount invested in Bitconnect could be around Rs 41,000 crore.”
The CID official noted that “at the time, one bitconnect coin was worth about $360 and people invested their bitcoins due to the attractive returns promised.” According to Coinmarketcap, the last recorded price for the bitconnect coin was about $0.68, and this past Monday (September 10) bitconnect was delisted from crypto-to-crypto exchange Tradesatoshi, as reported by TNW.
Darji was the one arrested at the Delhi airport when he was on his way back from Dubai. As for Kumbhani, a senior CID official elaborated “we have begun the process of getting a warrant issued against Kumbhani and will then press for a red-corner notice (RCN) to track him down.” An RCN id issued by Interpol at the request of a member state to urge other member countries to detain or arrest an accused.