Indian officials seize $190M in crypto associated with the BitConnect Ponzi scheme
Indian authorities have seized nearly $190 million worth of cryptocurrency linked to the notorious BitConnect Ponzi scheme, which collapsed in 2018. This seizure is part of an ongoing investigation into one of the largest crypto-related fraud cases in history, which left thousands of investors worldwide with significant losses.
According to a local report on February 15, the Enforcement Directorate (ED) in Ahmedabad confiscated cryptocurrency valued at ₹1,646 crore during its investigation into the BitConnect fraud.
The scheme allegedly deceived numerous investors under the pretense of high-return securities investments. Authorities have stated that the scam operated by luring investors with promises of lucrative returns, only to collapse in a classic Ponzi-style fashion, leaving investors with substantial financial losses.
In addition to the cryptocurrency, the ED also seized assets valued at ₹13,50,500 (approximately $15,582), a sports utility vehicle (SUV), and various electronic devices during raids conducted in Gujarat on February 11 and 15.
These assets were reportedly linked to individuals associated with BitConnect and its operations in India. The investigation revealed that BitConnect was responsible for defrauding around 4,000 investors across 95 countries, resulting in estimated global losses of approximately $2.4 billion.
The project, launched in 2016, gained rapid traction but ultimately collapsed in just two years, reinforcing the risks associated with unregulated crypto investment schemes.
BitConnect’s founder, Satish Kumbhani, played a central role in the operation of the fraudulent platform. He was charged by the U.S. Department of Justice in February 2022 for his involvement in orchestrating the Ponzi scheme. Reports suggest that Kumbhani created a vast network of promoters, incentivizing them with commissions to bring in new investors.
Between November 2016 and January 2018, funds were collected from investors across the globe, including many from India, with the promise of guaranteed high returns. However, like many Ponzi schemes, the platform ultimately became unsustainable, leading to its abrupt shutdown and financial ruin for investors.
Some victims of the fraud went to extreme lengths to recover their investments. In August 2024, the ED reported that Shailesh Babulal Bhatt, an investor who had lost a substantial amount in BitConnect Coin (BCC), allegedly took matters into his own hands.
Bhatt, along with a group of accomplices, is said to have kidnapped two of Kumbhani’s employees and extorted 2,091 Bitcoin (BTC), 11,000 Litecoin (LTC), and approximately ₹145 million ($1.7 million) in exchange for their release.
Authorities believe this was a desperate attempt to recover his lost investment, highlighting the extent of the financial devastation caused by the BitConnect collapse.
Meanwhile, the impact of crypto-related fraud continues to be a major concern for law enforcement agencies worldwide. The FBI’s “Operation Level Up” initiative, aimed at tackling cryptocurrency scams and fraud, reportedly prevented potential losses of approximately $285 million between January 2024 and January 2025.
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