SEC officials do not know the whereabouts of Satish Kumbhani, the founder of the crypto trading platform BitConnect, who last week defrauded investors with $ 2.4 billion in a Ponzi scheme. This puts the SEC in a lot of trouble, as they have to serve the 36-year-old entrepreneur with his court documents. In a statement Monday, the SEC said it had no address for Kumbhani, an Indian citizen, and suspected he may have fled to another country.
The justice ministry has accused Kumbhani of a number of crimes, including conspiracy to commit fraud, conspiracy to manipulate the prices of goods and conspiracy to commit international money laundering.
“Kumbhani’s whereabouts remain unknown and the Commission is unable to say when its efforts to locate him will be successful, if at all,” the SEC said in a statement.
To gain some time, the SEC is asking the U.S. District Court for the Southern District of New York to extend it by 90 days. As BitConnect is an unincorporated entity and not an official corporation, all court documents must be served on Kumbhani himself.
Founded for the first time in 2016, BitConnect has garnered a lot of attention on social media with its “Lending Program”, which allowed users to borrow their bitcoins in exchange for the appropriate cryptocurrency Bitconnect. The program says it can guarantee a return by using investors’ money to trade the volatility of cryptocurrency markets. ”
Under this program, Cumbhani and his accomplices advertised BitConnect’s alleged proprietary technology, known as BitConnect Trading Bot and Folatility Software, as capable of generating significant profits and guaranteed returns by using investors’ money to trade instability. cryptocurrency exchange markets. However, according to the indictment, BitConnect acted as a Ponzi scheme, paying earlier BitConnect investors with money from later investors, the DOJ’s Public Affairs Office said.
After years of cryptocurrency’s existence, U.S. government officials are battling fraud and cryptocurrency fraud at an ever-increasing rate. Last year, the Ministry of Justice set up a national cryptocurrency enforcement team to handle complex cryptocurrencies, and recently appointed a veteran cybersecurity prosecutor as its director.
BitConnect is just one of many cryptocurrency schemes that law enforcement has maintained in recent months. The founders of BitMex, a cryptocurrency exchange, circumvented anti-laundering laws in the United States and were sentenced to pay $ 20 million in fines. Earlier this month, Justice Department Ilya Liechtenstein and Heather Morgan, two entrepreneurs allegedly tried to launder more than 25,000 bitcoins stolen by Bitfinex hacking in 2016.
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