The DOJ's filings indicate that the project's founders diverted the funds and began operating a "textbook Ponzi scheme by paying earlier Bitconnect investors with money from later investors."
Satish Kumbhani, co-founder of BitConnect, plunged into deeper trouble as Indian police put him under investigation over a $2.4 billion scam that could land him 70 years in jail if proven guilty.
The U.S. securities regulator says Satish Kumbhani can’t be located and has likely relocated from his homeland India to an unknown address in a different country.
A San Diego court charged Satish Kumbhani with wire fraud, conspiracy to commit commodity price manipulation, and international money laundering.
The stash was seized from the “number one promoter” of the $2B BitConnect scam and is the largest single recovery of a digital currency fraud scheme ever.
The securities regulator has levied a new action against BitConnect founder Satish Kumbhani and the lead U.S. promoter after they allegedly defrauded 325,000 BTC from investors.
