The US Department of Justice has filed formal charges against the organizer of the cryptocurrency pyramid BitConnect, Satish Kumbhani. He could face up to 70 years in prison.
The BitConnect pyramid scheme was launched in February 2016, and gained the most popularity in 2017-2018. Kumbhani (Satish Kumbhani) and his accomplices raised funds for the “lending platform”, and also claimed to make a profit using a trading bot. Money to early investors was paid at the expense of new investors. In total, BitConnect has raised $2.4 billion in cryptocurrencies.
As FBI Special Agent Eric Smith pointed out, Kumbhani and his associates have launched a massive advertising campaign to attract victims to their fraudulent scheme. They enlisted various bloggers and celebrities to promote BitConnect.
“This indictment once again confirms the FBI’s commitment to identifying and arresting criminals who are defrauding investors and undermining the ability for honest business people to innovate in the emerging cryptocurrency space,” Smith said.
Kumbhani is accused of conspiring to commit electronic fraud, manipulating the price of the market, operating a money transfer business without a license, and conspiring to launder money on an international scale. If the court finds the organizer of BitConnect guilty on all charges, he could face up to 70 years in prison.
While Kumbhani is at large. The US Securities and Exchange Commission (SEC) filed a civil lawsuit against Kumbhani and BitConnect-promoting US citizens last September.
Source: Bits
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