The founder of BitConnect happens to be an Indian citizen named Satish Kumar Kumbhani. He was charged in the US by Justice Department for a 3.4 billion fraud related to crypto. If he is convicted, he will spend 70 years in prison, according to a Justice Department spokesperson.
According to the filed charges, BitConnect is considered a fraudulent crypto platform for investment. Its market cap reached a peak of $3.4 billion at one point. The scheme’s details were outlined in the indictment sheet. The 36-year-old is believed to have misled investors by saying that the Lending Program under the scheme would generate a lot of profit and returns were guaranteed. All people had to do was sign up and let the BitConnect Trading Bot do its work using volatility software.
The indictment also alleged that Kumbhani shut down operations to do with the Lending Program suddenly after a year. He tells his promoters network to manipulate the price and ensure that BitConnect’s currency price is propped up.
Other charges against Kumbhani include a conspiracy to carry out wire fraud, price manipulation of commodities and operating a money transmission business without a license etc. He could spend the rest of his natural life in prison if he is convicted. Under the indictment, Kumbhani is also charged with a conspiracy to carry out money laundering activities internationally. In November 2021, the Justice Department said it planned to sell crypto worth $56 billion seized as part of the BitConnect scheme.