India ED Seizes $198M in Cryptocurrency in Bitconnect Fraud Crackdown

India's Enforcement Directorate (ED) in Ahmedabad seized cryptocurrencies worth $198 million in a major crackdown on the Bitconnect cryptocurrency fraud. The operation, conducted under the Prevention of Money-Laundering Act (PMLA), 2002, took place on February 11 and 15, also resulting in the confiscation of Rs.13,50,500 in cash, a Lexus car, and multiple digital devices.

The investigation stemmed from First Information Reports (FIRs) filed by the Crime Investigation Department (CID) in Surat, revealing Bitconnect's fraudulent "Lending Program" that operated from November 2016 to January 2018. The scheme lured investors globally, including in India, with promises of high returns through a so-called "volatility software trading bot."

Authorities discovered that funds collected from investors were never invested as claimed. Instead, they were diverted to digital wallets controlled by the accused. The ED's intensive probe, involving tracking numerous web wallets and gathering ground intelligence, led to the identification and seizure of these digital assets.

Bitconnect, which collapsed in early 2018, has been exposed as a Ponzi scheme. In the United States, founder Satish Kumbhani was indicted in February 2022, but his whereabouts remain unknown. Glenn Arcaro, Bitconnect's top U.S. promoter, was sentenced to 38 months in prison and ordered to repay over $17 million to defrauded investors.

This massive $2.4 billion cryptocurrency scam continues to prompt global efforts to recover stolen assets and prosecute those responsible. The ED's recent action highlights India's commitment to tackling financial crimes in the digital asset space.