India, nonetheless has remained untraced ever because the promoter for his BitConnect Ponzi plan used to be charged by the SEC for defrauding American traders of over $2 billion.
SEC in its submitting popular that the convicted founder has most potentially fled to a foreign nation and “Kumbhani’s area stays unknown, and the Price stays unable to mutter when its efforts to detect him shall be a success, if in any respect.” The founder is charged with wire fraud, operating an unlicensed money transmitting industry, and three conspiracies: committing wire fraud; commodity label manipulation; and world money laundering
Linked: SEC charges 5 for illegally promoting $2 billion Bitconnect Ponzi plan
The BitConnect saga dates abet to ICO-generation and used to be among the most highlighted and talked about initiatives at the time.
The SEC noted that Kumbhani’s last known location was in his native country India, but has remained untraced ever since the promoter for his BitConnect Ponzi scheme was charged by the SEC for defrauding American investors of over $2 billion,
SEC in its filing noted that the convicted founder has most probably fled to a foreign country and “Kumbhani’s location remains unknown, and the Commission remains unable to state when its efforts to locate him will be successful, if at all.” operating an unlicensed money transmitting business, and three conspiracies: committing wire fraud; commodity price manipulation; and international money laundering
Related: SEC charges 5 for illegally promoting $2 billion Bitconnect Ponzi scheme
The BitConnect saga dates back to ICO-era and was among the most highlighted and talked about projects at the time.
Based in 2016, the crypto project was a world sensation by mid-2017 because it raised billions of dollars from world traders. The project promised a lending program based fully totally on proprietary “procuring and selling bot” and “volatility instrument” that can presumably well well provide 10% earning to traders by BCC token.
The DOJ charged Kumbhani for working a Ponzi plan by BitConnect’s lending program the build the project managed to siphon off $2.4 billion from traders. Bitconnect’s native token BCC recorded an all-time-high procuring and selling label of $463.31 at the tip of the market frenzy in December 2017 reaching a market cap of $3.4 billion.
In addition to this filing against BitConnect, the SEC has recently settled with an unregistered asset exchange that knowingly defied regulations in pursuit of profit and accused a mother-son pair of running a Ponzi scheme that stole $12 million from investors duped by claims of a crypto trading bot. Nathaniel Mott is a freelance news and features writer for Tom’s Hardware US, covering breaking news, security, and the silliest aspects of the tech industry. Get instant access to breaking news, in-depth reviews and helpful tips.
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Kumbhani and his co-conspirators also concealed the location and control of the fraud proceeds obtained from investors by commingling, cycling, and exchanging the funds through BitConnect’s cluster of cryptocurrency wallets and various internationally based cryptocurrency exchanges.
According to the indictment, to avoid regulatory scrutiny and oversight of BitConnect’s cryptocurrency offering, Kumbhani evaded U.S. regulations governing the financial industry, including those enforced by the Financial Crimes Enforcement Network (FinCEN). For example, although BitConnect operated a money transmitting business through its digital currency exchange, BitConnect never registered with FinCEN, as required under the Bank Secrecy Act.
“Crime, particularly crime involving digital currencies, continues to transcend international boundaries,” said Assistant Attorney General Kenneth A.
“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.”
“Today’s indictment reiterates the FBI’s commitment to identifying and addressing bad actors defrauding investors and sullying the ability of legitimate entrepreneurs to innovate within the emergent cryptocurrency space,” said Special Agent in Charge Eric B.
Las autoridades fiscales de los Estados Unidos, a través de la Comisión de Bolsa y Valores (SEC), introdujo una demanda civil contra Satish Kumbhani, fundador de la empresa de criptoactivos, «BitConnect», quien habría estafado 2 mil millones de dólares en criptomonedas.
El comunicado de prensa de la SEC da a conocer que BitConnect es «una oferta global fraudulenta y no registrada de inversiones en un programa que involucra activos digitales».
Khumbhani fue el principal promotor estadounidense de la compañía, que estafó un total de 2 mil millones de dólares a numerosos inversores. Lo hacía ofreciendo ofrecía sus fondos a un programa que BitConnect supuestamente reportaría altos rendimientos.
La SEC alegó a que Khumbhani y sus socios desviaron fondos de inversionistas a carteras digitales o wallet para su propio beneficio.
However, according to Bloomberg, a Securities and Exchange Commission (SEC) attorney said in a court filing Monday that he “has likely relocated from India to an unknown address in a foreign country.”
“Since November, the commission has been consulting with that country’s financial regulatory authorities in an attempt to locate Kumbhani’s address. At present, however, Kumbhani’s location remains unknown,” attorney Richard Primoff said.
Last September, the SEC separately sued Kumbhani, claiming he fraudulently raised more than $2 billion from investors in his cryptocurrency exchange platform, Bloomberg said. But the SEC didn’t know where he was and couldn’t serve him with the lawsuit.
Primoff asked US District Judge John Koeltl for an extension until May 30.
SEC said it wants to look for Kumbhani and if it finds him in the US, serve him with the complaint.
Prosecutors said Kumbhani created BitConnect in 2016 and the digital token, BitConnect Coin (BCC). He allegedly misled investors about BitConnect’s “Lending Program,” according to court documents.
Under this program, Kumbhani and his co-conspirators touted BitConnect’s purported proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” as being able to generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets.
Read: Is cryptocurrency the next Internet Bubble waiting to burst? (October 16, 2021)
As alleged in the indictment, however, BitConnect operated as a Ponzi scheme by paying earlier BitConnect investors with money from later investors.
The SEC alleged that “instead of deploying investor funds for trading with the purported trading bot,” BitConnect instead “siphoned investors’ funds off for their own benefit by transferring those funds to digital wallet addresses” that were controlled by people and organizations assisting the company with its scheme. That list of affiliates is said to include BitConnect founder Satish Kumbhani, lead promoter named Glenn Arcaro, and “a network of promoters around the world.” Those promoters were allegedly paid commissions, “a substantial portion of which they concealed from investors,” for their efforts to help the scam find more victims.
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