SEC Still Can't Find Scammer Behind $2.4B BitConnect Crypto Ponzi Scheme

The U.S. Securities and Exchange Commission (SEC) finally decided to sue BitConnect founder Satish Kumbhani for the multibillion crypto Ponzi scheme that he conducted well over three years ago — but he is nowhere to be found.

What Happened: Despite its best efforts, the SEC cannot locate Kumbhani, who is now convicted for defrauding U.S. investors of more than $2 billion. Monday's court filings revealed that Kumbhani's last known location was in India — his native country — and his current whereabouts are unknown.

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The SEC wrote in a filing that, “Kumbhani’s location remains unknown, and the Commission remains unable to state when its efforts to locate him will be successful, if at all." He is charged with wire fraud, operating an unlicensed money transmitting business and conspiring to commit wire fraud, commodity price manipulation and international money laundering.

Founded in 2016, BitConnect may be the darkest spawn of the initial coin offering (ICO) boom. It was one of the most highlighted and covered projects at the time, resulting in the cryptocurrency becoming a global hit by mid-2017 (when the ICO boom was at its highest).

BitConnect promised to deliver a lending program that leveraged a proprietary "trading bot" and "volatility software" that would distribute 10% returns to investors through the BCC token. The Department of Justice found that this lending program was just Kumbhani’s way to conduct a Ponzi scheme that raked in $2.4 billion from investors before the January 2018 rug pull.

Photo Courtesy of Richard Patterson on Flickr