Indicted by the US Department of Justice in a $2.4 billion Ponzi scheme, BitConnect founder Satish Kumbhani remains untraced following conviction.
In a court filing Monday, the Securities and Exchange Commission said Kumbhani’s whereabouts are unknown. The SEC noted that Kumbhani’s last known location was in his native India, but he has not been traced since the SEC charged the promoter of his BitConnect Ponzi scheme with defrauding US investors of more than $2 billion.
In his presentation, The SEC noted that the convicted founder most likely fled to a foreign country and that “Kumbhani’s location remains unknown, and the Commission remains unable to say when, if at all, its efforts to locate him will be successful.”The founder is charged with wire fraud, operating a money transfer business without a license, and three conspiracies: committing wire fraud, commodity price manipulation, and international money laundering.
The BitConnect saga dates back to the ICO era and was one of the most prominent and talked about projects at the time. Founded in 2016, the crypto project became a global sensation in 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% profit to investors via the BCC token.
The DOJ charged Kumbhani with running a Ponzi scheme through the BitConnect lending program, where the project managed to siphon off $2.4 billion from investors. Bitconnect’s native token BCC posted 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 in January 2018, driving the token price down to near zero and causing massive losses to investors.
The Justice Department also accused Kumbhani of creating a bogus 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 in which the creators used early funds to pay off old investors and then ran away after collecting billions based on the hype and crowding. ICO madness. Several promoters of the project in Australia and the US have already been convicted and face jail time.
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