In a report published Monday, the Securities and Exchange Commissions (SEC) indicates that Satish Kumbhani, the founder of BitConnect, is still not locatable and reports on the progress of the research by asking for a deadline to find him. The opportunity to recall the facts about a major scam, which would have generated more than 2 billion dollars of losses.
BitConnect facing SEC
Satish Kumbhani, the founder of BitConnect, is still wanted by the U.S. courts in connection with the Securities and Exchange Commissions (SEC) case against him. The charges against him include wire fraud, running a financial business without a licence and money laundering.
The platform, launched on 15 February 2016, claimed to offer high returns from trading through a so-called robot. In reality, it was a Ponzi scheme, based on affiliation, whereby sponsors received up to 7% of their referrals’ earnings. The more funds a user deposited on the platform and locked in for longer, the higher the promised returns, up to 2% per day.
According to an SEC report, the last known location of BitConnect’s founder was his native India. But since then all leads have been wrong, except that the courts believe he has moved again. This is why the courts have been given more time to serve the accused with the charges against them.
History of the case
In order to take advantage of the platform’s services, its user had to exchange other cryptocurrencies for BitConnect Coin (BCC). The advertising blitz by influencers at the time to bring in new victims resulted in the platform’s loss of over $2 billion. Recall that in a Ponzi scheme, newcomers pay first, and the scam is exposed when too many people want to withdraw their funds at once.
As of 7 November 2017, the UK is the first to take legal action against the platform, they are required to justify their legitimacy within two months. Then Texas and North Carolina demanded a closure of the platform on 3 January 2018, blaming a lack of transparency.
The scam then came to light, and after a high of $463 on 29 December, the BCC collapsed to less than $20 on 16 January and continued to fall until it crossed the $1 mark a few weeks later.
BCC price at the time
While others connected to BitConnect have already been brought to justice, we don’t know if Satish Kumbhani, its founder, will ever be found. However, this story is a reminder of the importance of doing one’s own research on a project, especially when the returns appear to be indecent over such long periods of time.
