Authorities in India Seize $190,000,000 in Crypto Assets Related to 2018 BitConnect Ponzi Scheme: Report

Law enforcement authorities in India reportedly seized crypto assets linked to the BitConnect Ponzi scheme that defrauded hundreds of victims before collapsing in 2018.

Indian Express reports that the Enforcement Directorate (ED) seized Rs (Indian Rupee) 1,646 crore or nearly $190 million in crypto assets during its investigation of BitConnect.

The agency, which is in charge of enforcing economic laws and combating financial crimes in India, also seized Rs 1.35 million ($15,550), an SUV and digital devices during searches in the Indian state of Gujarat on February 11th and 15th.

The ED says that from November 2016 to January 2018, the people behind the scheme allegedly amassed funds from investors around the world, including participants located in India. 

BitConnect co-founder Satish Kumbhani allegedly established a network of promoters who received commissions when they enticed investors into depositing cash and Bitcoin ( BTC ) into the purported lending program. 

The promoters also posted fictitious information on the BitConnect web portal, claiming an average of 1% returns per day or about 3,700% per year. 

The ED says that despite BitConnect’s representation that it could generate up to 40% monthly returns using a proprietary trading bot, the perpetrators of the scheme did not use the invested funds for trading but deposited them into digital wallets that they controlled.

Authorities also say the crypto wallets carried out transactions through the dark web to make them untraceable, but by following on-chain transactions and gathering ground intelligence, the agency identified the wallets and the location of the devices that held the cryptocurrencies.

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