new Delhi: Bitconnect founder Satish Kumbhani, who has been charged with orchestrating a $2.4 billion global Ponzi scheme, has disappeared from India, according to a Bloomberg report.
The Securities and Exchange Commission sued Kumbhani last September, claiming that he defrauded investors in his cryptocurrency exchange platform to the tune of more than $2 billion. But the SEC didn’t know where he was and couldn’t serve him in the trial.
On Monday the mystery deepened. SEC Attorney Richard Primoff said in a court filing that Kumbhani, 36, “possibly relocated from India to an undisclosed address in a foreign country. Since November, the commission has been attempting to trace Kumbhani’s address in that country.” is in consultation with the financial regulatory authorities of the U.S. However, at present, the location of Kumbhani remains unknown.”
Primoff sought an extension from US District Judge John Coetel until May 30. The SEC said it wants to trace Kumbhani and, if it finds him in the US, serve him with a complaint.
Kumbhani is facing charges of conspiracy to commit wire fraud and misappropriation of prices, operation of an unlicensed money transmitting business and conspiracy to commit international money laundering. If convicted on all counts, he faces a maximum prison sentence of 70 years.
According to court documents, Kumbhani of Hemel in Gujarat misled investors about Bitconnect’s “lending program”. The Justice Department said that Bitconnect reached a peak market capitalization of $3.4 billion.
US prosecutors said Kumbhani created Bitconnect and the digital token, Bitconnect Coin, in 2016.
In fact, the lending program was a massive Ponzi scheme that raised $2.4 billion from investors around the world before it closed in January 2018.
The US said that Bitconnect used money from new investors to make payments to the first one. He has been charged with wire fraud, conducting a business of transmitting money without a license, and three conspiracies: to commit wire fraud; commodity price manipulation; and international money laundering.
Last September, Glenn Arcaro, the top promoter of Bitconnect in North America, pleaded guilty. In November, prosecutors said they would sell approximately $57 million in cryptocurrency confiscated from Archaro. This month, a judge approved a revised order for the sale.
Kumbhani’s indictment seeks to forfeit $2.4 billion due to his actions.