Authorities From two U.S. States Solicit Indian Authorities to Seize BitConnect Promoter Property
Two U.S. state Authorities have solicited the CID in India to grab hold of the property of promoters of Bitcoin investment firm BitConnect, as per the reports of the Times of India.
BitConnect put a halt to its operations in the month of January this year. It was an open-source cryptocurrency and an investment program denounced for being a Ponzi scheme. The accusations were based on the multi-level marketing system deployed and the guarantee of colossal returns on customers' investments.
"The U.S. states of Illinois and Arizona are asking the Criminal Investigation Department in India to seize all the property of the promoters, who are suspected of raising around $5.6 billion from various investors."
Most of the funds were allegedly put into the firm following the demonetization of high-value banknotes at the directive of the BJP government in 2016.
The department added that it will request the probe of such investors by ED and IT authorities.
"The investigation department claims that those who put their money in this cryptocurrency company after demonetization are suspected of money laundering."
At first, the commercial skulduggery scheme was reported by businessman Shailesh Bhatt. He claimed that he had been abducted and robbed of $1.2 million worth of BTC by local police. The agency said that according to their investigations, Bhatt had invested around $275K in BitConnect and after the company terminated operations in January 2017, he abducted an employee of BitConnect and extorted Litecoins, Bitcoins, and cash worth $25 million from him."
At the end of August, Indian police arrested Divyesh Darji for purportedly promoting BitConnect and swindling a number of investors. Darji, a resident of Surat city, avowedly said that he had been the India head of BitConnect. The CID claims that staff at BitCoinnect's Surat office divulged that promoters had overall amassed tens of millions of rupees from thousands of investors.
Following the termination of BitConnect's activities, a number of users in the U.S. opened a class action lawsuit against the company, seeking requital for lost funds, reportedly amounting to USD 771,000. The suite claims that the BitConnect tokens were unregistered securities in a wide-ranging Ponzi scheme.