Indian Authorities Seize $190 Million Tied to BitConnect Crypto Scam

Authorities in India have retrieved approximately $190 million from a crypto scam in a real-world seizure of devices they tracked down digitally.

India’s Directorate of Enforcement tracked devices containing the wallets of the scammed crypto, and was then able to retrieve the physical devices. In addition to the crypto assets, authorities seized a black Lexus SUV and about $15,500 worth of cash.

Despite the latest recovery, it’s still only a small slice of the haul with an estimated 325,000 Bitcoin taken from investors based on false claims. That amount of Bitcoin was valued at $2.4 billion back in 2018, but is worth more than $31 billion today.

In a statement, authorities said that they “found that many transactions were carried out through [the] dark web to make the transactions untraceable. However, by tracking numerous web wallets and gathering ground intelligence, ED was able to zero in on the wallets and the premises where the digital devices containing said cryptocurrencies were available.”

The BitConnect scheme was alleged a Ponzi-style scam by the US Securities and Exchange Commission back in 2022. BitConnect claimed to offer 40 percent monthly returns to its customers by using a bot. This, it claimed, was able to detect and exploit crypto price volatility for accurate investments that would deliver such high returns.

The scheme required investors to send cryptocurrency to BitConnect, which was then invested. The reality was that its founder Satish Kumbhani and promoter Glenn Arcaro were funneling it all into wallets they controlled, rather than investing it as claimed.

While Arcaro pleaded guilty to conspiracy charges, in 2023, and promised restitution payments of over $17 million to more than 800 BitConnect investors, his partner Kumbhani disappeared from his home nation of India and is still missing.

Indian authorities have transferred the coins to their own accounts, although many victims likely reside outside of India. It’s unclear whether repayments will be made to victims, and if so, who will be eligible.

Edited by Andrew Hayward