India’s Directorate of Enforcement Seizes $190M in BitConnect Fraud Case

India’s anti-money laundering unit said it seized about 16.5 billion rupees ($190 million) worth of crypto, some cash and a Lexus car during investigations into the collapse of the BitConnect cryptocurrency fraud.

BitConnect, founded in 2016 by Satish Kumbhani, raised billions of dollars from investors for a protocol that purportedly paid out 10% in interest earnings. The Ponzi scheme collapsed in 2018, and in 2023 a California judge ordered $17 million in restitution to be paid to the victims.

Kumbhani, an Indian citizen, was indicted in the U.S. and is wanted in India.

The firm’s claims to invest the money “were a sham, as the accused knew that BitConnect did not deploy investor funds for trading with its purported Trading Bot rather, they siphoned investors’ funds off for their own benefit, and their associates’ benefit, by transferring those funds to digital wallet addresses controlled by them,” the Directorate of Enforcement (ED) said in a Saturday statement.

A “complex web of transactions” through “numerous crypto wallets” was used to hide the identities of the wallets’ owners.

“However, by tracking numerous web wallets and gathering ground intelligence, ED was able to zero-in-on the wallets and the premises where the digital devices containing said crypto currencies were available,” it said.