India Seizes $198M in Crypto Amid Bitconnect Fraud Investigation

India Seizes $198M in Crypto Amid Bitconnect Fraud Investigation

India’s Enforcement Directorate (ED) in Ahmedabad announced on February 15 that it had seized cryptocurrency worth ₹1,646 crore (approximately $198 million) in connection with the Bitconnect cryptocurrency fraud case. The raids, conducted on February 11 and 15, were carried out under the Prevention of Money Laundering Act (PMLA) of 2002.

According to officials, the operation led to the discovery and seizure of illicit proceeds in the form of various cryptocurrencies valued at approximately ₹1,646 crore. In addition to the digital assets, authorities also confiscated ₹13.5 lakh in cash, a Lexus vehicle, and multiple digital devices.

The ED’s investigation was based on First Information Reports (FIRs) filed by the Crime Investigation Department (CID) in Surat.

Investigators revealed that between November 2016 and January 2018, Bitconnect operated a fraudulent and unregistered securities offering called the “Lending Program.” This scheme lured global investors, including those in India, by falsely promising high returns. The company’s founder established an international network of promoters who earned commissions for attracting new participants.

The ED further disclosed that Bitconnect claimed to use a “volatility software trading bot” that allegedly generated monthly returns of up to 40%. However, Indian authorities found that instead of investing the collected funds, the perpetrators redirected them to digital wallets under their control.

By tracking multiple web wallets and gathering intelligence on the ground, the ED was able to identify and seize digital assets linked to the fraudulent scheme.

Bitconnect collapsed in early 2018 after being exposed as a Ponzi scheme. U.S. authorities also charged its founder and top promoters with conspiracy to commit wire fraud and money laundering. Glenn Arcaro, a key U.S. promoter of Bitconnect, was sentenced to 38 months in prison and ordered to pay over $17 million in restitution to victims worldwide. Meanwhile, Bitconnect’s founder, Satish Kumbhani, was indicted in February 2022, but his whereabouts remain unknown. Authorities continue efforts to recover funds and hold those responsible accountable for the $2.4 billion cryptocurrency fraud.