According to a court filing, the indicted creator of crypto trading site BitConnect has gone dark. It makes it impossible for federal officials to serve him with a lawsuit in connection with an alleged $2.4 billion Ponzi scheme.
Search for BitConnect Satish Kumbhani Continues
The Securities and Exchange Commission charged Satish Kumbhani, a 36-year-old Indian citizen and resident last year with defrauding investors into supporting the site. The Justice Department also charged Kumbhani with fraud and money laundering last week.
According to the statement, the SEC discovered in October that “Kumbhani has likely relocated from India to an unknown residence in a different foreign country.”
Efforts to locate Kumbhani’s residence have been ongoing since November, according to a complaint filed by the European Commission. When it comes to finding Kumbhani, the Commission has no idea how long it will take to find him.
According to Bloomberg, a federal judge granted the SEC’s request for a 90-day extension. The agency, however, searches for Kumbhani and serves him with the complaint if he is located in the United States. While the criminal case against BitConnect’s creator is in the process, the civil lawsuit against him is still on hold.
The SEC’s action aims to recoup money for investors who were cheated and levy sanctions on Kumbhani and his co-conspirators.
Meanwhile, the US Department of Justice claims BitConnect was a “classic Ponzi scheme.”
Prosecutors claim that Kumbhani and his accomplices claimed BitConnect’s “loan program.” In which investors exchanged bitcoin for the platform’s own crypto token. It would employ “purported proprietary technology” to guarantee investors returns through trading in the global cryptocurrency market.
Instead, the firm’s finances collapsed, and it forced to close permanently in 2018.
An indictment states that the supposed technology was a front for a Ponzi scheme, not to make money. The Justice Department claimed in a statement that “money from later investors compensated early BitConnect investors to promote the fraudulent scheme.”
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