India’s Enforcement Directorate (ED) has seized digital assets worth approximately INR 1,646 crore ($190 million) in a Prevention of Money Laundering (PMLA) case, linked to the BitConnect Ponzi scheme.
According to a press release dated 15 February 2025, the ED conducted multiple raids across Gujarat on the 11th and 15th of February 2025. During this raid, they confiscated substantial amounts of cryptocurrency, cash, an SUV, and other digital devices.
The BitConnect scam defrauded approximately 4000 investors across 95 countries. Total losses incurred by investors are estimated at $2.4 billion.
Back in 2022, US Department of Justice (DoJ) indicted BitConnect founder Satish Kumbhani for orchestrating a global Ponzi scheme.
At the time, US Attorney Randy Grossman for the Southern District of California had said, “This indictment alleges a massive cryptocurrency scheme that defrauded investors of more than $2 billion. The US Attorney’s Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud.”
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ED, Ahmedabad has conducted search operations on 11/02/2025 and 15/02/2025 in the case of Bitconnect Crypto currency fraud, under the provisions of the PMLA, 2002. During the search operations, Proceeds of Crime in the form of various Crypto currencies worth Rs. 1646 Crore… pic.twitter.com/EEMFYvFar3
— ED (@dir_ed) February 15, 2025
ED’s Intervention In BitConnect Case
According to local media reports dated 15 February 2025, the Criminal Investigation Department (CID) filed multiple First Information Reports (FIRs), prompting the ED to start investigating this case in 2018. Gujarat police officially booked Kumbhani in 2022 in connection with the multi-crore scam.
The ED deployed domain experts who traced the flow of funds across several crypto wallets. They confirmed that many transactions used the dark web to hide fund origins and destinations. This made the transactions harder to trace.
During their latest raids, the ED seized
- Cryptocurrency assets worth Rs 1646 crore, that were traced back to wallets controlled by Kumbhani and his associates.
- ₹50 Lakhs in physical currency.
- An SUV believed to have been purchased with illicit funds.
- Multiple digital devices, potentially containing pieces of evidence important to the investigation.
Earlier, the ED in Ahmedabad had attached INR489 crore (approx $6 million)worth of movable and immovable properties in connection with the BitConnect cryptocurrency scam.
Fictitious Returns Amounting To Average Of 1% Per Day Was Advertised
Kumbhani launched BitConnect in 2016. The company functioned as a cryptocurrency investment platform that through its “Lending Program” promised returns to investors returns that were too good to be true.
BitConnect’s unregistered lending program ran from November 2016 to January 2018. The scheme advertised a guaranteed 40% return on investments to those willing to invest, based on their in-house developed volatility software trading bot. Their web portal posted fictitious returns amounting to an average of 1% per day or 3700% annualized.
BitConnect advised its investors to deposit Bitcoins (BTC), which they then converted to the platform’s native crypto coin – BitConnect Coin (BCC). BitConnect, under Kumbhani’s leadership, also engaged in a multi-layered Ponzi scheme to expand their reach. Existing investors were promised commissions to bring in prospective new clients.
However, scrutiny revealed that no actual trading had taken place. Investigators found that earlier investors were receiving returns from funds contributed by new investors. This Ponzi scheme continued till the company abruptly shut shop in January 2018 after financial regulators issued cease and desist orders, resulting in considerable losses to investors.
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Key Takeaways
- Indian authorities seized $190M in crypto from the BitConnect Ponzi scheme.
- BitConnect scammed investors worldwide, using a dysfunctional trading bot and multi-level marketing.
- The scamsters used funds from new investors to pay returns to earlier investors.
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