At the start of 2018, an open-source cyber money platform BitConnect was clamped down by its promoters after being accused of deceiving clients and functioning as a Ponzi scheme. According to reports, the latter lost millions of Indian rupees.
As the investigation went on, BitConnect’s "angel" and the head of its India’s department Divyesh Darji was arrested on August 19 in Delhi airport upon the arrival from Dubai. The news reported the media outlet Financial Express with the reference to Gujarat police in India.
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Darji’s arrest is a significant change in the scenario as after the shutdown, most of the trading bourse’s patrons became impossible to trace.
Darji, One of BitConnect’s “Untraceable” Patrons, Arrested
As per the words of inspector P G Narwade of CI-Crime of Gujarat police, Dubai was Darji’s recent place of living. Against him, there was issued a look-out circular. The police managed to arrest him thanks to the report from the Immigration Department once Darji got onto the flight from Dubai to Ahmedabad.
How BitConnect Allegedly Winded Round Investors’ Little Fingers
Founded in 2016, in one-year span BitConnect issued its first coin. However, the business was shut down earlier this year amid accusations of duping its depositors. Within a year, BitConnect emitted 28 million coins. Investors piled into 18 million out of them.
After the arrest of Darji, Narwade announced the entity organized events in India, promising its attendants with high-interest rates on piling in BitConnect. The daily interest rate made up 1%, the company pledged. Once the company was closed down in January this winter, its coin’s price was $362.
As the report states, the probe has shown that before escaping BitConnect took from one investor a number of bitcoins equal to approximately $163,760. But in general, the business's "angels" gathered dozens of millions from thousands of people who piled into their coins.
How it All Started. The Gordian Knot
The police learned about the supposed fraud after Shailesh Bhatt, a builder based in the Indian city of Surat, claimed some local policemen carried him and his business associate off and fished out their digital assets or bitcoins worth up to $1,300,000.
However, according to Indian investigators, Bhatt himself allegedly extorted over $22 million at gunpoint from two people. The latter was Satish Kumbhani’s employee, who was among BitConnect’s patrons. Bhatt also piled into BitConnect, but once "Kumbhani & Co." broke down the trading bourse, he lost his savings.
Afterward, as CID alleges, Bhatt on par with his abettors kidnapped Kumbhani’s ex-workers and made them send more than 2,400 BTC units to Bhatt’s crypto-wallet.
CID began keeping an eye on each actor of the case after the information popped up. Unexpectedly, Kumbhani and other BitConnect’s patrons dropped the trading venue and vanished without a trace. Thus, clients were let down as they no longer could cash their virtual assets out or transfer the sums electronically.