A federal grand jury indicted the founder of a cryptocurrency investment and trading platform on charges related to fraud and creating a “global Ponzi scheme.”
36-year-old Indian national Satish Kumbhani is the founder of BitConnect, an online trading platform for investors to exchange virtual currencies. Kumbhani allegedly misled investors about BitConnect’s lending operations, which were said to have used proprietary technology that gave crypto investors large returns on market transactions.
Officials at the Department of Justice said that BitConnect paid initial investors with money made from later investors and lied about the worth of the platform’s own cryptocurrency, BitConnect Coin. Kumbhani, along with other co-conspirators, is also charged with evading U.S. financial regulations.
“This indictment alleges a massive cryptocurrency scheme that defrauded investors of more than $2 billion,” said U.S. Attorney Randy Grossman for the Southern District of California. “The U.S. Attorney’s Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud.”