In an apparent attempt to recoup losses, an Indian man allegedly abducted two individuals connected to the $2.4 billion BitConnect Ponzi fraud.
In a statement released by the Indian Enforcement Directorate, it was revealed that Shailesh Babulal Bhatt, one of the investors in BitConnect Coin—the token that was used as the platform’s native cryptocurrency—had abducted two employees of BitConnect founder Satish Kumbhani to recover losses through ransom payment.
The BitConnect Ponzi scheme, which deceived investors into purchasing BitConnect Coins and lending them with the promise of earning up to 1% daily, was introduced in 2016. It was veiled as a high-yield investment program.
The loan platform claimed to be driven by “volatility software” and the “BitConnect Trading Bot.” Nevertheless, BitConnect’s managers used the money they raised from new investors to pay investors’ returns, just like in any other Ponzi scheme.
The scam collected $2.4 billion from victims globally during its two-year operation, and both the scheme and the token crashed after state regulators issued cease-and-desist orders in the United States.
The entire stockpile, estimated to be worth $146.8 million, was extorted by Bhatt from BitConnect employees in exchange for 2,091, 11,000, and around $1.7 million in Indian rupees, according to the ED’s statement.
After additional research, it was discovered that his collaborators had collected $34 million, which they had utilised to buy “immovable properties, gold, and other assets.” The ED has seized movable and immovable properties connected to the case for $52 million.
Following his appearance before an Ahmedabad court, Bhatt was taken into custody on August 13 by India’s Prevention of Money-Laundering Act.
After two First Information Reports were submitted to the State Crime Investigation Department in 2022, an inquiry into Bhatt was opened. In 2017, he was initially taken into custody one month following the kidnapping.
BitConnect’s founder, Satish Kumbhani, is still missing, although several of the scheme’s principal backers have faced legal action over time.
John Louis Anthony Bigatton was found guilty in July 2024 of giving unauthorised financial advice by the Australian Securities & Investments Commission.
Similar ransomware incidents were discovered by the Malaysian authorities, who detained 14 individuals for kidnapping a Chinese national and a Malaysian woman and demanding $1.2 million in cryptocurrency in exchange.
