Property worth over Rs 38 Crore ($5.5 million) has been seized in the Indian state of Gujarati from promoters of the Bitconnect cryptocurrency scam. According to the Times of India, the property includes 280 Bitcoins which at the current prices are worth nearly $2.9 million. The seizure of the properties follows the arrest of Bitconnect promoter for the Asia region Rakesh Savani, over the weekend.
Other properties which are believed to have been acquired using proceeds from the Bitconnect scam include land worth around Rs 18 crore ($2.6 million).
Apart from seizing two properties worth Rs 15 crore and 3.23 crore belonging to the accused, the CID has also seized 280 Bitcoins. The price of one Bitcoin is approximately Rs 7 lakh, making the seizure of Bitcoins worth Rs 19.60 crore.
The Bitconnect scam lured investors by promising unrealistically high returns on their investment in its Initial Coin Offering. As of mid-December in 2017 when Bitcoin was setting a record high, the Bitconnect token (BCC) boasted a market capitalization of more than $2.5 billion. Each token was valued at over $500 at the time.
With the ICO price having been just under 20 cents this was an appreciation of nearly 300,000 percent. The tokens were however available only on Bitconnect’s proprietary exchanges. In January last year, the price of BCC crashed to mere cents after securities regulators in the U.S. issued public warnings to Bitconnect investors suggesting that the investment scheme was a Ponzi.
The arrest of Savani and the seizure of the properties comes nearly a year since the alleged head of Bitconnect in India, Divyesh Darji was arrested. Among other things, Darji was accused of holding seminars and events across India promoting Bitconnect. He was arrested last year in August while traveling from Dubai to India.
Outside of India, a top Bitconnect promoter in Australia, John Bigatton, was also arrested and his assets frozen earlier this year. His arrest and the seizure of his assets was done at the recommendation of the Australian Securities and Investments Commission.
There are likely to be more arrests in the future as investigations by different law enforcement agencies around the world are still active. Just a couple of months ago, the FBI invited victims of the Bitconnect scam to get in touch with a view of aiding its investigation.
Last modified: March 4, 2021 2:38 PM