The U.S. Department of Justice (DOJ) officially announced the indictment against Indian citizen Satishkumar Kurjibhai Kumbhani, whom they identify as primarily responsible for a criminal conspiracy involving BitConnect, a cryptocurrency company founded by the defendant.
Authorities argue that, in collaboration with at least two accomplices, Kumbhani defrauded BitConnect investors of more than $2 billion USD, in what could become one of the largest cryptocurrency frauds in history.
The indictment alleges that BitConnect asked investors to use a loan program that promoted the alleged proprietary technology, known as “BitConnect Trading Bot” and “Volatility Software”, ensuring that this software was capable of generating substantial and guaranteed profits.
The DOJ argues that these alleged technologies did not generate such profits and simply functioned as a front for the operation of a variant of the classic Ponzi scheme, applied to cryptocurrency investment.
Kumbhani is also accused of a conspiracy with which he sought to artificially increase the value of his cryptocurrency project as a desperate measure to maintain the stability of the Ponzi scheme, this with the argument that cryptocurrency had become a commodity for BitConnect investors.
Finally, the defendant faces charges for deploying an international money laundering conspiracy, sending Bitcoin and other cryptocurrencies to unknown locations to try to erase their trail of fraudulent activity.
The DOJ has asked all potential victims of this fraudulent operation to contact its offices to find some possible answers to their questions, which could greatly increase the conviction against the defendant.
The increase in the popularity of cryptocurrencies and the ease of investments in this field has made millions of people prone to all kinds of fraudulent schemes, registering millionaire losses. The DOJ assures that the authorities will continue to work to contain the threats to citizens derived from any fraudulent cryptocurrency scheme.
To learn more about information security risks, malware variants, vulnerabilities and information technologies, feel free to access the International Institute of Cyber Security (IICS) websites.
He is a cyber security and malware researcher. He studied Computer Science and started working as a cyber security analyst in 2006. He is actively working as an cyber security investigator. He also worked for different security companies. His everyday job includes researching about new cyber security incidents. Also he has deep level of knowledge in enterprise security implementation.