On Friday, the U.S. Department of Justice announced that BitConnect founder Satish Kumbhani had been charged by a federal grand jury with defrauding investors of $2.4 billion through its lending scheme, which emerged to be a Ponzi, CoinDesk reported.
A string of serious charges
Kumbhani was charged with wire fraud and conspiracy to commit wire fraud, operating an unlicensed money transmitter, conspiracy to commit price manipulation, and conspiracy to launder funds to set up a global Ponzi scheme.
The DOJ alleges he traded cryptocurrencies using funds provided by investors, repaying earlier ones with funds from later ones.
SEC had filed a lawsuit against Kumbhani and BitConnect promoter Glenn Arcaro on similar charges in late 2021. The latter pleaded guilty.
IRS criminal investigation agent Ryan Korner commented:
As cryptocurrency gains popularity and attracts investors worldwide, alleged fraudsters like Kumbhani are utilizing increasingly complex schemes to defraud investors, oftentimes stealing millions of dollars. However, make no mistake, our agency will continue our long tradition of following the money, whether physical or digital, to expose criminal schemes and hold the fraudsters accountable for their illegal acts of trickery and deceit.
Assistant Attorney General Kenneth Polite Jr. agrees that internationally operating criminals are still using cryptocurrencies. He stated:
The department is committed to protecting victims, preserving market integrity, and strengthening…
