BitConnect founder indicted for $2.4 Bn global crypto ponzi scam

Feb 26, 2022

Satish Kumbhani, 36, of Hemal, India; had been charged with conspiracy to commit wire fraud, commodity price manipulation, operation of an unlicensed money transmitting business, and international money laundering.

The Drama Isn’t Over

Customers made money proportional to the people they managed to get involved in the business and were paid with money coming in from new users – characteristic of a Ponzi scheme.

Netting nearly $2.4 billion in ill-gotten funds

In May 2021, SEC filed a lawsuit against five individuals associated with BitConnect. Satish Kumbhani was not on the list.

The SEC Also Has a History With Bitconnect

According to the indictment, to avoid oversight of BitConnect’s cryptocurrency offering, Kumbhani evaded U.S. regulations governing the financial industry, including those enforced by the FinCEN. 

For example, although BitConnect operated a money transmitting business through its digital currency exchange, BitConnect never registered with FinCEN, as required under the Bank Secrecy Act.

If convicted of all counts, Satish Kumbhani, the founder of cryptocurrency investment platform BitConnect, faces a maximum total penalty of 70 years in prison.