- The Arrest of Shailesh Babulal Bhatt
- Background of the BitConnect Scam
- Consequences for BitConnect Founders
Indian authorities have arrested Shailesh Babulal Bhatt in connection with the cryptocurrency platform BitConnect, which allegedly raised $2.4 billion from investors.
The Arrest of Shailesh Babulal Bhatt
Bhatt, who had heavily invested in BitConnect Coin, allegedly took extreme measures to recover his lost funds. According to the Indian Enforcement Directorate (ED), Bhatt, along with accomplices, kidnapped two employees of Satish Kumbhani, the founder of BitConnect.
The ransom demanded included both cryptocurrency and cash. Bhatt is accused of extorting 2,091 Bitcoins (valued at approximately $125 million), 11,000 Litecoins, and ₹14.50 crore in cash, totaling around ₹1,232.50 crore ($146 million).
The investigation revealed that Bhatt used a portion of the extorted funds to reward his accomplices and purchase assets such as properties and gold. Specifically, Bhatt shared ₹289 crore ($1.7 million) of the extorted money with his partners in crime. This funding was reportedly used for luxury purchases and investments.
The arrest follows an ongoing investigation initiated by complaints filed by the Surat Police CID against Satish Kumbhani. Kumbhani, who disappeared after shutting down BitConnect, is facing legal actions in both the U.S. and India.
Background of the BitConnect Scam
BitConnect, launched in 2016, posed as a high-yield investment program offering returns of up to 1% daily through its native token, BitConnect Coin. The scheme promised substantial profits, claiming to use sophisticated 'trading bots' and 'volatility software' to generate returns.
However, BitConnect was a classic Ponzi scheme, using funds from new investors to pay returns to earlier participants. By January 2018, the platform collapsed following cease-and-desist orders from U.S. state regulators, leaving investors worldwide with significant losses.
Consequences for BitConnect Founders
The BitConnect scam has seen several notable legal actions against its promoters. Glenn Arcaro, a U.S.-based promoter, pleaded guilty to wire fraud conspiracy in September 2021 and was sentenced to 38 months in prison in September 2022. Similarly, John Bigatton, another prominent promoter, was convicted in a Sydney district court for providing unlicensed financial advice in July 2024.
The arrest of Shailesh Babulal Bhatt is another chapter in the pursuit of those involved in the fraudulent BitConnect scheme, which has left many investors with significant losses. Authorities continue their investigation and efforts to hold accountable those responsible.
