The alleged fraudulent cryptocurrency investment platform reached a peak market capitalization of $3.4 billion, but the alleged scammers “only” obtained approximately $2.4 billion from investors.
The founder of BitConnect, Satish Kumbhani, saw a federal grand jury in San Diego return an indictment charging him with orchestrating a global Ponzi scheme.
The scheme was built around BitConnect’s “Lending Program” which touted the firm’s purported proprietary technology as being able to generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets.
Satish Kumbhani and his team stand accused of operating a Ponzi scheme that paid earlier BitConnect investors with money from later investors.
Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 70 years in prison.
The alleged fraudulent cryptocurrency investment platform reached a peak market capitalization of $3.4 billion, but the alleged scammers “only” obtained approximately $2.4 billion from investors.
After operating for approximately one year, Kumbhani allegedly and abruptly shut down the Lending Program and directed his network of promoters to fraudulently manipulate and…
