Indian authorities have successfully recovered more than $200 million stolen in a fraudulent scheme by BitConnect. The investigation led to the tracking of cryptocurrency wallets and the confiscation of digital assets, as well as real estate and a black Lexus.
BitConnect marketed itself as a high-profit investment platform in cryptocurrencies, promising investors monthly returns of 40%. Users were required to transfer funds to a system that claimed to operate based on a unique trading algorithm.
In 2022, the US Securities and Exchange Commission (SEC) determined that BitConnect was a Ponzi scheme, where investors’ funds were simply redistributed to the project’s founders, Satish Kumbhani and Glenna Arkaro.
Several defendants were charged in relation to the scheme. Arkaro pleaded guilty and agreed to pay $17.6 million in compensation to the victims. Kumbhani, on the other hand, disappeared in 2022 after leaving India, and his current whereabouts are unknown.
The assets seized by Indian authorities include around $190 million in cryptocurrency and real estate valued at $56 million. Through a detailed analysis of transactions, specialists were able to track the movement of funds in cryptocurrencies used to conceal criminal proceeds. Attempts to hide operations through the Darknet were uncovered, but analysts managed to restore the transaction chain and identify devices with cryptocurrencies for confiscation.
Despite the efforts of law enforcement, the recovered funds represent only a fraction of the stolen money. At the time of the scheme’s exposure, 325,000 bitcoins were in exchange accounts, equivalent to more than $31 billion. Therefore, the $250 million seized accounts for less than 10% of the total stolen assets.
The plans for the confiscated funds by Indian authorities remain unclear, considering the victims come from various countries. The investigation is ongoing, and international organizations may get involved in the case as it develops.