Indian police launched an investigation into Bitconnect and detained its founder after a bitcoin investor reported being defrauded by a global cryptocurrency “Ponzi scheme”. According to US authorities, the market value of the scheme reached $3.4 billion at its peak. The founder and his co-conspirators allegedly received about $2.4 billion from investors.
Bitconnect founder wanted by Indian police
The founder of Bitconnect, one of the most notorious fraudulent crypto investment schemes, is wanted by the Indian police in Pune, Maharashtra, after the United States indicted him for defrauding investors.
Pune police have launched an investigation into the multi-crore encryption scheme and detained its founder, Satish Company, after a local lawyer filed a preliminary media report (FIR) on Tuesday. He also mentioned six others involved in the scheme. The lawyer stated in the FIR that he was defrauded of approximately 220 bitcoins.
Indian police are now searching for the accused but no arrests have been made. They are also investigating whether the same people defrauded more investors.
Kompany, an Indian national, is already under investigation by the FBI. He was indicted by the United States in February for his role as the founder of the crypto fraud scheme. The US Department of Justice (DOJ), which has described Bitconnect as a “global Ponzi scheme”:
Bitconnect is an alleged fraudulent cryptocurrency investment platform that has reached a peak market capitalization of $3.4 billion.
The Department of Justice explained that Kompany, 36, of Himal, India, “misleaded investors” about Bitconnect’s lending program. They claimed that it used proprietary technology, namely “Bitconnect Trading Bot” and “Volatility Software” in order to “make significant profits and guaranteed returns by using investor funds to trade on the volatility of the cryptocurrency exchange markets.” The agency confirmed:
Bitconnect acted as a Ponzi scheme by paying early Bitconnect investors with money from later investors.
“In total, Kompany and his co-conspirators received approximately $2.4 billion from investors,” the Justice Department added.
What do you think of the Indian police searching for the founder of Bitconnect, a “Ponzi scheme”? Let us know in the comments section below.
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