Indicted by the United States Department of Justice in a $2.4 billion Ponzi scheme, BitConnect founder Satish Kumbhani remains untraced following his conviction.
In a court filing on Monday, the Securities and Exchange Commission said that the whereabouts of Kumbhani remains unknown. The SEC noted that Kumbhani’s last known location was in his native India, but he has remained untraced ever since the promoter for his BitConnect Ponzi scheme was charged by the SEC for defrauding American investors of over $2 billion.
SEC in its filing noted that the convicted founder has most probably fled to a foreign country and “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 founder is charged with wire fraud, operating an unlicensed money transmitting business and three conspiracies: committing wire fraud, commodity price manipulation and international money laundering
The BitConnect saga dates back to the initial coin offering (ICO)-era and was among the most highlighted and talked about projects at the time. Founded in 2016, the crypto project became a global sensation by mid-2017 as it raised billions of dollars from global investors. The project promised a lending program based on a proprietary “trading bot" and “volatility software" that would offer 10% earning to investors via its BCC token.
The DOJ charged Kumbhani for running a Ponzi scheme via BitConnect’s lending program where the project managed to siphon off $2.4 billion from investors. Bitconnect’s native token BCC recorded an all-time-high trading price of $463.31 at the peak of the market frenzy in December 2017, reaching a market cap of $3.4 billion.
The founders rug pulled the project by January 2018, crashing the token price to near zero and causing massive losses to investors.
The DOJ also accused Kumbhani of creating a fake market demand for BCC to lure more unsuspecting investors. The project, like many others in the ICO era, turned out to be a massive pyramid scheme where the creators used early funds to pay off old investors and later ran away after collecting billions based on hype and ICO craze. Several promoters of the project across Australia and the United States have already been convicted and facing jail.