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Elaborate Bitcoin [Bitconnect] Scam Nets $3 Billion in India

Last Updated March 4, 2021 3:54 PM
Shaurya Malwa
Last Updated March 4, 2021 3:54 PM

The Shailesh Bhatt saga from India’s merchant-dominant state of Gujarat hit new highs last week after the elaborate network of politicians, kidnappers, law enforcement officers, and local authorities unraveled loan sharks.  In all, Bhatt’s bitcoin scam is estimated at a mammoth $3 billion, all in BTC.

Ruling Party Connections

Months before the Indian ruling party elections go into full swing, Prime Minister Narendra Modi faces an embarrassing situation of sorts after prominent politicians and high-ranking police officers from Modi’s home state were found facilitating the cryptocurrency scam.

CCN.com has been closely following developments since Bhatt was first reprimanded in February 2018, which saw the prime accused confess to local police about kidnapping investors in connection with a Bitconnect investment scheme.

At the time, Bhatt alleged continual harassment from police authorities who kidnapper the builder and demanded 200 BTC, or $1.8 million, for his safe release. The builder duly paid this amount.

However, Bhatt found himself on the other side of the law after authorities discovered several inconsistencies in his incident account, leading officers to believe they had stumbled upon a scam spanning over continents and involving a few hundred million.

Subsequently, arrests were made after Bhatt helped police identify the guilty and unfortunately, they even included Nalin Kotadiya, a member of Modi’s lawmaking department, in the list of accused.

Networks all Around the World

Bhatt and Kotadiya remain absconding; it is believed that the two parties are at fierce loggerheads with each other, as evidenced by their continual blame game at each other.

While Bhatt made appearances at local police stations to provide his account, Kotadiya posted a video  on YouTube in April 2018, naming Bhatt as the prime purveyor of the scam while maintaining his innocence.

In the video, Kotadiya threatens to release damning evidence against Bhatt and several others, including politicians.

While centered in Surat, Gujarat’s diamond-centric industrial city, the scam extends as far as Texas, U.S., and reportedly even involves local celebrities.

Bitconnect Used to Scam Investors

For the uninitiated, Bhatt’s scam saw Bitconnect, a much-tainted “dead coin,” being offered to investors as a promising cryptocurrency investment for those who missed the Bitcoin brigade. Investors were asked to invest BTC in turn of Bitconnect pay-outs every month, with return figures quoted at 40 percent of total investment.

Using the framework as mentioned earlier, Bhatt and his accomplices were able to trap unsuspecting businessmen and wealthy individuals, using celebrities and politicians as pawns in their evil game – presumably to build legitimacy and gain investor trust.

The scam came to light after Bhatt, and another accomplice squared up on two Bitconnect representatives in Surat, demanding over 2,000 bitcoins as ransom.

However, the enterprising accomplice double-crossed Bhatt and contacted his uncle, none other than Kotadiya, to trap Bhatt and extort all of the illegally-gained hauls.

Featured image from Shutterstock.