A federal grand jury in San Diego indicted the founder of the BitConnect crypto investment platform on a variety of fraud, unlicensed money transmitting and money laundering charges on Friday, almost four years after HBO’s “Last Week Tonight” host John Oliver highlighted it on a show about the then-burgeoning cryptocurrency industry.
The Department of Justice alleges that BitConnect founder Satish Kumbhani orchestrated a $2.4 billion “global Ponzi scheme.”
Calling BitConnect an “alleged fraudulent cryptocurrency investment platform that reached a peak market capitalization of $3.4 billion,” the DoJ said that the Indian citizen and his “co-conspirators touted BitConnect’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.”
After shutting down the Lending Program at the heart of BitConnect, Kumbhani “directed his network of promoters to fraudulently manipulate and prop up the price of BitConnect’s digital currency, a commodity known as BitConnect Coin, to create the false appearance of legitimate market demand,” the DoJ alleged in a Feb. 25 statement.
Crypto’s Reputation
It’s worth noting that BitConnect, which promoted itself aggressively on social media, had plenty of skeptics before Oliver took it on.
On Nov. 30, 2017, Mike Novogratz — a former president of $54 billion hedge fund Fortress…
