Indian authorities seize loot from BitConnect crypto-Ponzi scheme Devices containing crypto wallets tracked online, then in the real world India’s Directorate of Enforcement has found and seized over $200 million of loot it says are the proceeds of the BitConnect crypto-fraud scheme.

BitConnect claimed it developed a bot capable of detecting and exploiting volatile cryptocurrency prices in ways that delivered investors monthly returns of 40 percent. To get those (spoiler alert) too-good-to-be-true returns, investors were asked to sign up for a “lending program” that required them to send cryptocurrency to BitConnect, which would run its amazing investo-bot and deliver astronomical returns.

In 2022, the U.S. Securities and Exchange Commission [1]alleged the scheme was a scam akin to a Ponzi scheme as investors’ cryptocurrency was funneled into wallets controlled by BitConnect founder Satish Kumbhani and promoter Glenn Arcaro rather than being invested as promised.

[2]

Charges were laid and Arcaro pled guilty, before pleading guilty to conspiracy charges and in 2023 [3]promising to pay restitution of $17,646,801 to over 800 BitConnect investors.

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[5]

Kumbhani [6]disappeared . In 2022 he left India, his home nation, and his whereabouts remain unknown.

India’s Directorate of Enforcement on Saturday [7]annnounced it had seized “various cryptocurrencies” valued at Rs. 1646 Crore ($190 million) plus Rs. 486 Crore ($56 million) worth of “movable and immovable properties” connected to BitConnect. A shiny black Lexus was also seized.

[8]India's banking on the bank.in domain cleaning up its financial services sector

[9]US accuses Canadian math prodigy of $65M crypto scheme

[10]First all-Indian chips to debut this year, 25 more local designs in the works

[11]Gilmore Girls fans nabbed as Eurocops dismantle two major cybercrime forums

The regulator explained its investigation started with an examination of “the complex web of transactions carried in numerous crypto wallets to unmask the origin and controllers of said crypto wallets.”

Those efforts “found that many transactions were carried out through Dark Web to make the transactions untraceable. However, by tracking numerous web wallets and gathering ground intelligence, ED was able to zero-in-on the wallets and the premises where the digital devices containing said crypto currencies were available.”

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Subsequent searches led to recovery of the devices.

That account of the raids suggests Indian authorities possess sophisticated abilities to both unravel crypto dealings and work with carriers to locate devices in the real world.

Sadly, this bust probably doesn’t represent a big slice of BitConnect’s booty. When the outfit was busted, it held 325,000 Bitcoin valued at around $2 billion. The value of those coins haul is likely considerably higher today, as Bitcoin’s value since March 2024 has generally been higher than it was during the years BitConnect operated.

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The $250 million of assets recovered last weekend therefore probably represent less than ten percent of missing funds.

Indian authorities say they've transferred the coin to their own accounts but haven't said what happens next - a reasonable stance as not all of BitConnect's victims reside in India and other nations continue to investigate the matter. ®

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[1] https://www.theregister.com/2021/09/03/bitconnect_sec_ponzi/

[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z7RoUXKFsntpXb-3spyrBwAAAMI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[3] https://www.irs.gov/compliance/criminal-investigation/victims-of-bitconnect-scheme-to-receive-more-than-17-million-to-compensate-for-losses

[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z7RoUXKFsntpXb-3spyrBwAAAMI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

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[6] https://www.theregister.com/2022/03/02/bitconnect_ceo_disappears/

[7] https://enforcementdirectorate.gov.in/sites/default/files/latestnews/Press%20Release-Search-%20Bitconnect-15.02.2025.pdf

[8] https://www.theregister.com/2025/02/10/india_bank_dotin_plan/

[9] https://www.theregister.com/2025/02/04/math_prodigy_crypto_scheme/

[10] https://www.theregister.com/2025/01/24/india_semiconductor_industry_designs_debut/

[11] https://www.theregister.com/2025/02/02/eurocops_takedown_cybercrime/

[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z7RoUXKFsntpXb-3spyrBwAAAMI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

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[14] https://whitepapers.theregister.com/