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Indian Authorities Seize $190 Million in Cryptocurrency in BitConnect Investigation
Indian enforcement authorities have seized cryptocurrency worth $190 million (Rs 1,646 crore) in connection with a BitConnect investigation. The Enforcement Directorate (ED) in Ahmedabad, responsible for investigating economic crimes and financial fraud, conducted searches across Gujarat on February 11 and 15.
The ED also seized $16,300 (Rs 13,50,500) in cash, an SUV, and various digital devices. The investigation falls under the Prevention of Money-Laundering Act (PMLA), following initial cases registered by Surat’s CID Crime Police Station.
How BitConnect Duped Investors
According to ED officials, BitConnect operated globally between November 2016 and January 2018, targeting investors worldwide, including India. The unincorporated organization created an extensive network of promoters who received commissions for bringing in new investors.
Introduced in 2016, the BitConnect Ponzi scheme disguised as a high-yield investment program, where investors were tricked into acquiring BitConnect Coins and promised returns of up to 40% monthly through a supposed “volatility software trading bot.”
The platform allegedly displayed “fictitious” returns on its web portal, claiming approximately 1% daily returns, equivalent to 3,700% annually. However, as with any Ponzi scheme, the operators of BitConnect paid investors returns using funds solicited from newer investors.
Over its two-year run, the scheme amassed $2.4 billion from victims worldwide, with both the scheme and the token collapsing after U.S. state regulators issued cease-and-desist orders.
ED’s Investigation and Findings
Despite the challenges posed by the complex web of cryptocurrency transactions, many conducted through the dark web to hide their origins, authorities successfully traced several web wallets and located digital devices containing the cryptocurrencies through ground intelligence.
“The claims made by BitConnect were found to be fraudulent, as the operators diverted investor funds to digital wallets controlled by the accused instead of trading.”
This seizure adds to earlier ED actions in the case, which included the attachment of assets worth $56.5 million (Rs 489 crore). Sources show that foreign nationals were also among BitConnect’s investors, and U.S. federal authorities are investigating the “main accused.”
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