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Brains behind $2.4 Billion Bitcoin Ponzi Scheme Arrested in Delhi

Reading Time: 2 minutes by on August 20, 2018 Altcoins, Business, Crime, Finance, News

The man behind the Asian branch of the $2.4 billion cryptocurrency scam operation Bitconnect has been arrested by police officers on August 18, 2018, from the Gujarat Criminal Investigation Department at Delhi Airport on his return to India. Divyesh Darji, who has reportedly been living as a fugitive in Dubai was apprehended at Delhi Airport as the investigation into the cryptosphere’s biggest scam to date continues around the world.

Astonishing Rise and Fall of Bitconeeeeeeect

Bitconneeeect
(Source: Google Plus| Divyesh Darji)

At its peak, Bitconeeeeeeect was said to be worth an estimated $3.2 billion, buoyed by vast amounts of investor funds poured in from the start of the scam in December 2016. In conjunction with several other promoters and influencers, Darji hosted seminars, roadshows, and other events where he promised investors fantastic returns in exchange for buying BCC with bitcoin.

Taking advantage of popular investment sentiment during the Indian government’s demonetization drive, Darji convinced Indian investors to part with vast sums of bitcoin as “investments” in BCC. From launch to demise, Bitconnect sold more than 250,000 BCC tokens to investors in India and around the world.

The company promised investors daily interest rates of up to one percent and promised all new investors that their money would double in 100 days. The structure of the scam has been described as “multi-layered,” incorporating a scam coin with no useful value purchased in exchange for currency (bitcoin), a multi-level marketing high yield investment program (HYIP), and several outrageous promises with no chance of being delivered.

Despite warnings, investors in India and around the world dumped huge amounts into Bitconnect, leading to a peak coin valuation of more than $400 at the beginning of 2018. Predictably, things came to the inevitable conclusion in January 2018 when the promoters abruptly sold off f BCC on the market and cashed out, leading to an overnight price crash of more than 90 percent, ending up at just $2.

The platform then announced that it was shutting down its crypto exchange and lending program immediately, and investors were left in the lurch with little hope of recovering their investment in what was now in the popular crypto parlance, a “shitcoin.”

Darji’s Luck Runs out

Accused of fronting the $2.5 billion scam by regulators, Darji, and his co-conspirators fled India to several different locations. Darji himself chose to settle for a life of exile in Dubai, where a look-out circular was promptly issued against him. It is thought that he chose Dubai because he was already familiar with the city, having executed most of Bitconnect’s operations out of Dubai’s Burj Khalifa tower.

Though Bitconnect was officially registered as a UK entity, the company also had an operational base in Surat. Investigators issued look-out notices for Darji and his team around the world as the Gujarat CID investigation became bigger and bigger, roping in high profile personalities like ex BJP MLA Nalin Kotadiya, Mahendra Chauhari, and Satish Kumbhani.

Since going under, Bitconnect has faced several legal and physical challenges. BTCManager reported in March that angry investors physically attacked Indian Bitconnect promoters. In April, a class action lawsuit was also filed against the company.

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