The Department of Justice (DoJ) announced that the founder of an alleged fraudulent cryptocurrency trading platform, which at one time had a peak market of $3.4 billion, has been indicted by a San Diego Federal grand jury, according to a Feb. 25 release.
DoJ alleges that the crypto trading platform BitConnect amounted to a “global Ponzi scheme” founded by Satish Kumbhani. DoJ says that BitConnect managed to evade the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and other enforcement methods by never registering with the FinCEN, which is required by law.
“Crime, particularly crime involving digital currencies, continues to transcend international boundaries,” Assistant Attorney General Kenneth A. Polite Jr. of DoJ’s Criminal Division said in the release. “The department is committed to protecting victims, preserving market integrity, and strengthening its global partnerships to hold accountable criminals engaging in cryptocurrency fraud. We thank our partners around the world for their continued efforts.”
DoJ says that the BitConnect platform and its founder paid early investors with the funds from later investors, earning Kumbhani and his co-conspirators up to $2.4 billion from investors. Court documents also allege that Kumbhani and his co-conspirators shut down a supposed key feature of the platform after a year and later artificially manipulated the BitConnect digital currency to prop up its price.
“[The] indictment…
