A high-ranking promoter of Bitconnect has been arrested at the Delhi airport India for his involvement in the alleged multi-billion dollar Ponzi scheme that blew up earlier this year.
Bitconnect was touted as a multi-level marketing venture wherein a trading bot would generate revenue for investors over time. Funds would be deposited, locked for a time with no withdrawal option, and then returned with interest. Investors were also rewarded for bringing in new recruits to invest their money.
The project was openly suspected of being a scam by many influencers and members of the cryptocurrency community from the outset due to the impossibly high returns promised in the company’s promotional materials, but this didn’t prevent many people from investing in the hopes of it being a legitimate enterprise.
It was confirmed as a scam when the team shut down the BCC crypto exchange and investing platform after being served a cease and desist letter from Texas regulators, declaring an ICO shortly beforehand as a last ditch effort to squeeze more money out of users before exit scamming with the millions already invested.
Head of the Asian division of Bitconnect Divyesh Darji was traveling from Dubai to the Indian capital on Saturday where he was arrested following an investigation by India’s Criminal Investigation Department (CID), the investigation and intelligence branch of the Indian state police force.
Darji’s Linkedin profile describes him as a teacher with 25 years of experience and states that he has a degree in commerce, holds an LLB, and runs both a Surat-based cryptocurrency training institute and Navivan, a fitness solution company. There is no mention of Bitcoinnect on the profile.
DGP Ashish Bhatia of the CID said:
“They launched their own ‘Bitconnect coins’ soon after demonetisation. They promoted the company on social media and by holding gala functions in cities across the world. They lured investors with 60% monthly interest and incentives in the form of ‘referral interest’.
Although it still has a market cap of over $6 million, Bitconnect will be delisted from the last cryptocurrency exchange still offering it as a trading pair this September, making it a dead coin with no liquidity.
The case is connected to the infamous Guarajat cryptocurrency scam implicating members of the Indian government in a money-laundering scheme involving Bitconnect. The others accused by the CID of involvement in Bitconnect promotion, Satish Kumbhani, Dhaval Mavani, and Suresh Gorasiya, have yet to be arrested. Surat-based builder Shailesh Bhatt allegedly kidnapped Indian Bitconnect promoters Dhaval Mavani and Piyush Savaliya to recover a major investment he had made in the company, and was himself subsequently kidnapped and robbed of $1.8 million by a police superintendent and nine other police force members with ties to Nalin Kotadiya, a former member of the legislative assembly (MLA) of the ruling political party of India who has since gone on the run to avoid prosecution.
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Last modified: May 20, 2020 6:05 PM UTC