India’s law enforcement has arrested a man suspected of kidnapping two people connected to a once well-known crypto ‘Ponzi’ in an attempt to “recover his investment.”
In an Aug. 17 statement, the Indian Enforcement Directorate (ED) of Ahmedabad said Shailesh Babulal Bhatt lost money investing in BitConnect Coin, a cryptocurrency linked to the now-defunct crypto platform BitConnect — which authorities have labeled a global ‘Ponzi’ scheme.
To “recover his investment,” the ED alleges Bhatt, along with accomplices, kidnapped two employees of BitConnect’s creator Satish Kumbhani, extorting 2,091 Bitcoin (BTC), 11,000 LiteCoin (LTC) and around $1.7 million (145 million Indian rupees) in return for their release.
The ED says during its investigation, Bhatt revealed he paid his accomplices $34 million (2.9 billion Indian rupees) for “their active participation “in kidnapping and extortion, which was further used to purchase “immovable properties, gold and other assets.”
Bhatt was arrested on Aug. 13 under India’s Prevention of Money-Laundering Act (PMLA) and has been in ED custody after appearing before a Special Court (PMLA) in Ahmedabad.
According to the ED, the investigation into Bhatt was opened based on two First Information Reports (FIR) about BitConnect from the State Crime Investigation Department (CID) in Surat.
The law enforcement agency says it has already recovered “movable and immovable properties” worth $52 million (4.4 billion Indian rupees). The investigation is still ongoing.
Related: 800 victims of ‘massive’ Bitconnect fraud to receive $17M restitution
BitConnect launched in 2016 and collapsed in 2018, with 4,000 people from 95 countries losing an estimated $2.4 billion. It’s alleged the whole enterprise was a massive Ponzi scheme.
Bitconnect founder Satish Kumbhani was charged by the Department of Justice (DOJ) in February of 2022 for running an alleged Ponzi scheme via BitConnect’s Lending Program.
He was also the subject of a police investigation in India and sued by the US Securities and Exchange Commission (SEC) over the Bitconnect collapse. As of 2024, his whereabouts are still unknown.
At least two others involved in BitConnect have faced charges.
Prominent US-based promotor, Glenn Arcaro, pleaded guilty to wire fraud conspiracy charges in September 2021. He was sentenced to 38 months in prison for his participation in Bitconnect on Sept. 16, 2022.
John Bigatton, another prominent promoter of the now-defunct crypto exchange, was convicted in a Sydney district court in July for providing unlicensed financial advice.
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