The founder of BitConnect, Kumbhani, was charged for his Ponzi scheme, which he executed with the help of his ‘Lending Program’. This program is a part of BitConnect and was accused by a federal grand jury in San Diego. Satish Kumbhani, the founder of BitConnect, was charged with fraud and misleading some investors worldwide for $2.4 billion. The Ponzi scheme that Kumbhani used was to pay the early investors with the money from the later BitConnect investors.
In this process, a total of $ 2.4 billion has been taken by Kumbahni and his accomplices from his trusted investors. Though in 2017, BCC made an all-time highest trading price of $ 463.31, it suddenly declined within a few months, causing considerable losses to all the investors. This made him use the Ponzi scheme, where he gave assurance to investors that he would incur guaranteed returns and profits.
BitConnect’s Fraudulent Actions Were Caught Red-Handed
The DOJ reported that BCC also faked demand with its co-conspirators through various ways of manipulation in the market. He also added that the remaining investments were transferred with the motive of hiding them to several wallets and global cryptocurrency exchanges. This charge was accepted by Glenn Arcaro, the former promoter of BitConnect, where he pleaded guilty for his role in this fraudulent business.
Kumbhani disregarded the Bank Secrecy Act by not registering with FinCEN and committed wire fraud, manipulation of commodity prices, international money laundering, and many more. A criminal investigation is currently in process, and in case Kumbhani gets convicted, he would receive a penalty of 70 years. Furthermore, as reported by Cointelegraph, SafeMoon has also copied the Ponzi scheme and misled their investors by promising unrealistic profit margins and persuading them to buy tokens.