U.S. authorities are unable to locate the founder and chief architect of a $2.4 billion digital currency Ponzi scheme just days after his indictment. According to the U.S. securities watchdog, Satish Kumbhani has vanished from his homeland in India.
In a filing with the Southern District of New York, the U.S. Securities and Exchange Commission (SEC) noted that it didn’t know his whereabouts when it filed its action last year against Kumbhani. In October, it learned that he had likely relocated from India to an unknown address in a different country.
“Since November, the Commission has been consulting with that country’s financial regulatory authorities in an attempt to locate Kumbhani’s address. At present, however, Kumbhani’s location remains unknown, and the Commission remains unable to state when its efforts to locate him will be successful, if at all,” the agency told Judge John Koeltl in its February 28 filing.
Kumbhani was recently indicted by a federal grand jury in San Diego for his role in the BitConnect Ponzi scheme, which defrauded tens of thousands of investors worldwide. Charged with five offenses, including international money laundering and wire fraud, he stands to spend 70 years behind bars if convicted.
Before the Department of Justice (DOJ) went after Kumbhani, the SEC had charged him with securities violations for raising more than $2 billion from U.S. investors through BitConnect’s Lending Program. The SEC has always maintained that interest-bearing accounts are under its purview, which has seen it crack the whip on Coinbase for attempting to launch such a product and settle for $100 million with BlockFi for its existing lending products.
However, when the DoJ launched its criminal proceedings against Kumbhani, Judge Koeltl halted the SEC’s civil case.
In its latest filing, the SEC asked Judge Koeltl for a 90-day extension, up until May 30. While this limit doesn’t apply to service in another country, the SEC says it can’t rule out that Kumbhani could be living in the United States. Should it be able to locate him inside the U.S., it will serve him with its complaint. The judge granted the request this week.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple, Ethereum,
FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.