Extreme Revenge: An Indian Victim of the BitConnect Ponzi Scheme Arrested Over $146 Million Extortion Case!

Ben
Mon, 19 Aug 2024 07:49:47 +0000
Crypto Schemes, Cybercrime, Ponzi, ticker, BitConnect, Satish Kumbhani, Shailesh Babulal Bhatt

This is a Bollywood story: The Indian Enforcement Directorate (ED) announced the arrest of Shailesh Babulal Bhatt, a Gujarat resident, in connection with a massive cryptocurrency extortion case valued at over ₹1,200 crore (approximately $148 million). Bhatt, who has a history of involvement in kidnapping and extortion incidents, was apprehended. He is one of the many victims of the notorious $2.4-Billion BitConnect crypto Ponzi scheme.

The case traces back to the notorious collapse of the crypto-based Ponzi scheme Bitconnect that lured investors in 2016-18 with promises of high returns. Allegedly, the scheme obtained approximately $2.4 billion from investors. Bitconnect promised extraordinary returns on investments, sometimes up to 40% per month, luring investors from across the globe. These promises were substantiated by the alleged Bitconnect Trading Bot, a supposed algorithmic trader that proficiently capitalized on Bitcoin’s price volatility.

However, in January 2018, the platform’s founder, the Indian citizen Satish Kumbhani, 38, abruptly shut it down, vanishing with investors’ funds. In February 2022, the U.S. DOJ filed charges against Kumbhani, but he is still on the run.

Among the BitConnect victims was Bhatt, who had invested a substantial amount in Bitconnect. In response to his financial losses, Bhatt took extreme measures to recover his funds, including allegedly kidnapping two of Kumbhani’s employees and extorting cryptocurrency and cash from them.

In a drastic attempt to recover his lost money, Shailesh Babulal Bhatt allegedly resorted to kidnapping two employees of Kumbhani. According to the ED, Bhatt demanded and successfully extorted 2,091 Bitcoins (valued at approximately $125 million), 11,000 Litecoins, and ₹14.50 crore in cash, now totaling a staggering ₹1,232.50 crore ($146 million).

Further investigations revealed that Bhatt did not act alone. He reportedly distributed ₹289 crore ($1.7 million) of the extorted money among his accomplices, who played crucial roles in executing the kidnappings and extortion. The ill-gotten gains were then used to purchase properties, gold, and other high-value assets.

This case underscores the growing concerns over the misuse of cryptocurrencies in criminal activities and the need for stringent regulatory oversight to prevent such incidents in the future.