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Indian authorities have arrested a man who allegedly kidnapped and extorted two employees of the defunct crypto platform BitConnect to recover his funds. Shailesh Babulal Bhatt lost money after investing in the Bitconnect Coin (BCC).
Bitconnect is a crypto project that gained worldwide recognition in 2017. It raised billions from investors in an initial coin offering (ICO) as its token market cap reached over $3 billion. However, authorities now consider it a Ponzi scheme.
<h3 id="span-style-font-weight-400-bahtt-extorted-125-million-in-crypto-from-kidnap-victims-span">Bahtt extorted $125 million in crypto from kidnap victims</h3>
According to a <a href="https://enforcementdirectorate.gov.in/sites/default/files/latestnews/Press%20Release_Arrest_Shailesh_Bhatt-17.08.2024.pdf" rel="noopener noreferrer nofollow" target="_blank">statement</a> from the Directorate of Enforcement (ED), Bhatt collected 2,091 Bitcoin, 11,000 Litecoin, and $1.7 million from the kidnap victims before releasing them. He shared $125 million with his two accomplices, who got $34 million.
The incident dates back to 2017, but authorities could only arrest Bhatt on August 13, 2024, under India’s Prevention of Money Laundering Act (PMLA). The alleged suspects have already spent some funds buying other assets, such as gold and real estate.
However, the ED claimed it had recovered about $52 million in movable and immovable assets; it now holds Bhatt in custody after securing approval from the Honourable Special Court for PMLA. With investigations still ongoing, authorities are likely looking to arrest the accomplices and recover the rest of the funds.
<h3 id="span-style-font-weight-400-seven-years-later-bitconnect-victims-wait-on-span">Seven years later, Bitconnect victims wait on</h3>
Meanwhile, the incident brings to light once again the <a href="https://www.cryptopolitan.com/bitconnect-scam-victims-to-receive-compensation/" rel="noopener noreferrer nofollow">BitConnect incident</a>. BitConnect was a crypto lending platform that launched in 2016. It offered proprietary trading technology that was guaranteed to give investors returns and had people invest in its BCC token.
However, it collapsed two years later in 2018 after <a href="https://www.bloomberg.com/news/articles/2018-01-16/bitconnect-closes-exchange-as-states-warn-of-unregulated-sales" rel="noopener noreferrer nofollow" target="_blank">closing</a> its platform, leaving investors with over $2.4 billion in losses. Global regulators have now described it as a Ponzi scheme, leading to the conviction of some of its promoters in the United States and Australia.
Although some promoters have been <a href="https://www.justice.gov/usao-sdca/pr/us-promoter-foreign-cryptocurrency-company-sentenced-prison-role-fraud-scheme" rel="noopener noreferrer nofollow" target="_blank">convicted</a> and now face jail terms, Satish Kumbhani, the mastermind of the whole thing, remains at large. The US Department of Justice and the Securities and Exchange Commission have already charged him, and he is also under investigation in India.
With his location unknown, most of the victims have been unable to recover their lost funds. In 2023, about 800 investors got <a href="https://www.justice.gov/opa/pr/crypto-fraud-victims-receive-over-17-million-restitution-bitconnect-scheme" rel="noopener noreferrer nofollow" target="_blank">judgment</a> to receive $17 million in restitution. However, this only accounts for a tiny fraction of lost funds and does not cover all affected investors.

Indian man arrested for kidnapping, extorting $125 million from BitConnect employees

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