It appears BitConnect, a Ponzi scheme with losses potentially running into the billions, was launched to skirt newly introduced demonetization law in India.
On November 8th, 2016, the Government of India announced the demonetization of all ₹500 and ₹1000 banknotes.
The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism.
The sudden nature of the announcement and the prolonged cash shortages in the weeks that followed created significant disruption throughout the economy.
If CID investigators are to be believed, this triggered the launch of the BitConnect Ponzi scheme.
CID officials said from the timing of the BCC offer, there was a direct connection between the unaccounted cash available after demonetization and Bit Connect.
The CID claim BitConnect was run by Satish Kumbhani, Divyesh Darji and Gautam Lathiya.
Kumbhani (right) was recently touted as the “founder of BitConnect” in a related extortion case.
The CID’s ongoing investigation revealed that all three BitConnect admins fled India in December, 2017.
A month later BitConnect collapsed.
Those of you following the collapse at the time will recall BitConnect urging investors to stay calm in the weeks leading up to the collapse.
According to the CID this was happening as Kumbhani, Darji and Lathiya made their escape.
CID crime officials said between December 2016 and December 2017, Bit Connect sold BCC for thousands of crores and the promotors then fled after shutting down operations.
Kumbhani, Darji and Lathiya and the money they stole through BitConnect remain at large.
BitConnect, possibly the largest MLM Ponzi scheme of all time with losses running into the billions, was started by three Indians trying to launder dirty money. Go figure…