India’s law enforcement arrested a man suspected of kidnapping two people associated with a once-well-known crypto “Ponzi” scheme in order to “recover his investment.” According to an Indian Enforcement Directorate statement, Shailesh Babulal Bhatt invested in BitConnect Coin, the platform’s native crypto.
India’s ED Arrests the Kidnapper in the Crypto-linked Extortion Case
In an Aug. 17 statement, the Indian Enforcement Directorate (ED) of Ahmedabad said Bhatt lost money investing in BitConnect Coin (BCC), which authorities have since then labeled a global Ponzi scheme.
Introduced in 2016, the BitConnect Ponzi scheme masqueraded as a high-yield investment platform. It tricked investors into buying BitConnect Coins and lending them with the promise of earning up to 1% daily. The lending platform was marketed as using the “BitConnect Trading Bot” and “volatility software.”
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However, like with any Ponzi scheme, BitConnect’s executives paid out rewards to investors using funds raised from new investors. Over a two-year period, the scheme collected $2.4 billion from victims globally, with both the scheme and the token failing after U.S. state regulators filed cease and desist orders.
According to the ED’s statement, Bhatt was able to extort 2,091 Bitcoin, 11,000 Litecoin, and around $1.7 million (145 million Indian rupees) in return for their release. The entire Kidnapped paid-out stash is valued at approximately $146.8 million.
According to the ED, all through its investigation, Bhatt confessed that he paid his associates 2.9 billion Indian rupees ($34 million) for “active participation” in kidnapping and extortion, which was then used to purchase “immovable properties, gold, and other assets.”
Bhatt was arrested on August 13 under India’s Prevention of Money Laundering Act (PMLA) and is in ED custody after appearing before a special court in Ahmedabad.
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