India Seizes $190 Million in Crypto Linked to BitConnect Ponzi Scheme

Highlights:

• India’s ED seized nearly $190 million in crypto and assets linked to BitConnect crypto fraud.
• The ED traced illicit funds through dark web transactions, wallets, and IP analysis. 
• Kumbhani and associates allegedly amassed crypto illegally, violating financial regulations.

Indian authorities seized nearly $190 million in cryptocurrency tied to the Bitconnect Ponzi scheme, which collapsed in 2018. The Enforcement Directorate (ED) also seized about $15,582, an SUV, and electronic devices during raids in Gujarat on Feb. 11 and 15.

The seized assets reportedly belonged to Bitconnect associates. The scheme, launched in 2016, caused 4,000 investors across 95 countries to lose an estimated $2.4 billion. The ED’s Ahmedabad office uncovered a crypto network hiding illicit funds through dark web transactions. By tracing wallets, IPs, and patterns, they found and seized the assets, transferring them to a cold wallet.

The ED initiated its investigation under the Prevention of Money Laundering Act (PMLA) following FIRs filed by the CID in Surat, Gujarat. Authorities discovered that Kumbhani and his associates amassed vast crypto holdings through fraud instead of legal earnings, classifying them as illicit proceeds.

Enforcement Directorate (ED) tweets, "ED, Ahmedabad has conducted search operations on 11/02/2025 and 15/02/2025 in the case of Bitconnect Cryptocurrency fraud, under the provisions of the PMLA, 2002. During the search operations, Proceeds of Crime in the form of various… pic.twitter.com/MnimZVGVId

— ANI (@ANI) February 15, 2025

BitConnect Founder Charged in Largest Crypto Ponzi Scheme

BitConnect founder Satish Kumbhani allegedly created a worldwide promoter network to advertise and expand the Ponzi scheme. The US Department of Justice (DOJ) charged him in February 2022. The United States Attorney’s Office calls BitConnect the “largest cryptocurrency fraud ever criminally charged.” As stated in documents filed with the New York Southern District Court on November 15, 2024, the SEC has been unable to locate Kumbhani.

BitConnect’s Fraudulent Operations

Between November 2016 and January 2018, BitConnect attracted investors through its “Lending Program,” offering unregistered securities. However, he ran a Ponzi scheme, using new investor funds to pay old ones before suddenly shutting it down. 

Promoters falsely claimed a trading bot could generate 40% monthly returns. Investors saw fake profits on BitConnect’s website, with exaggerated annual returns of 3,700%. Authorities found no real trading and traced the funds to Kumbhani and his associates’ wallets. Moreover, Kumbhani violated U.S. regulations by failing to register with FinCEN as the Bank Secrecy Act required.

Market Manipulation and Investor Losses

In 2017, BitConnect Coin (BCC) soared to $463.31, reaching a $3.4 billion market cap before crashing, causing massive investor losses. The DOJ stated that Kumbhani and his associates manipulated BCC’s market demand. The investments generated from these actions were allegedly concealed and transferred through BitConnect’s network of cryptocurrency wallets as well as various internationally based cryptocurrency exchanges.

Some victims of the BitConnect Ponzi scheme resorted to drastic measures. In August last year, the ED revealed that Shailesh Babulal Bhatt, who lost money in BitConnect Coin, allegedly collaborated with accomplices to kidnap two employees of Kumbhani. They demanded 2,091 Bitcoin, 11,000 Litecoin, and around $1.7 million (145 million Indian rupees) for their release. The ED stated that Bhatt carried out the act to “recover his investment.”