Enforcement Directorate uncovers massive scam involving fictitious returns, with investigations revealing siphoning of investor funds through a global network
The Enforcement Directorate (ED) has seized cryptocurrency worth Rs 1,646 crore during its ongoing investigation into the BitConnect cryptocurrency fraud. The seizure, which also includes Rs 13,50,500, an SUV, and several digital devices, follows searches conducted in Gujarat on February 11 and 15.
The ED's probe is based on FIRs registered by the CID Crime Police in Surat. The case pertains to an alleged scam where investors, both in India and abroad, were duped between November 2016 and January 2018 under the guise of a securities investment program. BitConnect, a decentralized network, was reportedly led by its founder who established a global network of promoters, offering commissions to attract investments.
The fraudsters promoted a "volatility software trading bot" that promised returns of up to 40% per month. These claims were bolstered by fictitious returns posted on BitConnect’s website, alleging an average of 1% daily returns. However, the ED revealed that these promises were fraudulent, as the platform did not actually deploy investor funds for trading. Instead, the accused siphoned off the money, transferring it to digital wallet addresses under their control.
The ED traced a complex network of crypto wallets involved in the transactions, many of which were linked to the dark web to conceal their tracks. However, through diligent tracking of web wallets and gathering intelligence, the agency was able to pinpoint the location of the digital assets and devices involved in the scheme. This breakthrough has led to significant seizures and further scrutiny of the fraudulent activities surrounding BitConnect.
