US wants Gujarat police to seize property of accused in Rs 41k cr Bitcoin scam

AHMEDABAD: Two US states, Illinois and Arizona, have written to CID crime officials in Gujarat, asking them to seize the property of the promoters of a cryptocurrency investment firm, BitConnect, who are suspected to have made off with Rs 41,000 crore of investors’ money, most of which poured into the firm soon after the demonetization of high-value currency notes by PM Narendra Modi in November 2016, though the company had been formed before it.
“Those who invested in this virtual currency company after demonetization are suspected of laundering black money. We will write to the enforcement directorate and income tax authorities to probe such investors,” a CID crime official said.

He added, “After the con call centre scam, this is the next scam for which US authorities have contacted us. Authorities of the US states of Illinois and Arizona wrote to us asking us to seize the property of the promoters of BitConnect, as citizens of these states had invested in the company and lost money.”
The cryptocurrency investment fraud came to light after a Surat builder, Shailesh Bhatt, registered a complaint against the then SP of Amreli, Jagdish Patel, a local crime branch inspector, Anant Patel, and former Dhari MLA, Nalin Kotadiya, for kidnapping him and extorting Bitcoins worth Rs 12 crore from him.
“The investigation found that Bhatt had invested Rs 2 crore in BitConnect and after the company shut shop in January 2017, he kidnapped an employee of BitConnect, Dhaval Mavani, and extorted Bitcoins, Litecoins and cash worth Rs 155 crore from him,” a CID crime official said.
CID crime investigators said they have since learned that Satish Kumbhani and Divyesh Darji, the two promoters of BitConnect, began their cryptocurrency-based investment operations in December 2016, after demonetization, and lured in thousands of investors by promising 800% returns per annum on investments. Investors were made to transfer their Bitcoins to the firm, and were issued BitConnect coins in return, which they could trade and on which they received interest.
“At the time, one BitConnect coin was worth about $360 and people invested their Bitcoins due to the attractive returns promised. While Darji was arrested from the Delhi airport on his way back from Dubai, Kumbhani is still absconding,” said a CID crime investigator.
CID crime officials said they recovered BitConnect coins from Darji’s e-wallet, but its value has now crashed to between $3 and $4 per BitConnect coin and they do not want to redeem them right now and deposit the money in the account meant for money seized in this case.
“Kumbhani was tracked down to South Korea some time ago, but by the time we could react, he had flown back to Dubai. He supposedly handled the worldwide operations of the company and may have possession of a large amount of money in Bitcoins, which belongs to investors,” a senior CID crime officer said.