U.S Authorities Pressuring Indian Authorities To Seize BitConnect Promoter’s Properties

Authorities in the U.S states of Illinois and Arizona are urging their counterparts in India to seize properties belonging to BitConnect Investment program promoters. The authorities have written to the Criminal Investigation Department of India urging the agency to follow through on the matter.

BitConnect ceased operations early in the year after it found itself in trouble  over claims it was a Ponzi Scheme set up to defraud unsuspecting investors. Promoters of the investment program are accused of running a multi-level referral system that promised unrealistic astronomical returns.

Initial reports indicate that Satish Kumbhani and Divyesh Darji, the two key promoters, launched the cryptocurrency investment program as soon as demonetization came into effect in India. The program reportedly promised returns of up to 800%   per annum per investment. Investors were urged to transfer their Bitcoin (BTC) holdings into BitConnect in exchange of BitConnect tokens on which they were to receive interest.

Following the collapse of BitConnect early in the year, a number of U.S investors who had invested in the program lodged a class action lawsuit seeking compensation for lost funds. The investors are seeking as much as $771,000.  In their lawsuit, the investors maintain that BitConnect tokens were essentially unregistered securities as part of a wider complicated Ponzi scheme.

U.S authorities believe that at the peak of the alleged Ponzi scheme, the perpetrators were able to defraud investors as much as $5.6 billion. BitConnect is believed to have come into contact with such a huge sum of money as people sought ways to stash high-value bank notes that the government was planning to do away with.

It has also emerged that some people invested in BitConnect at the peak of the demonetization drive as a way of laundering money. Investigators have since launched investigations as they seek to track the individuals.

Amidst the calls for tougher actions, Indian authorities have already arrested Divyesh Darji believed to be one of the insiders in the BitConnect Ponzi Scheme. Darji arrest followed claims that he was a chief promoter of the scheme. It is also alleged that the Seurat City resident acted as BitConnect representative in India.

U.S Authorities are not the only ones to have raised concerns about BitConnect operations.  Businessman Shailesh Bhatt who claims to have been kidnapped and robbed $1.2 million worth of BTC has also lodged complaints against BitConnect.