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A few days after the US Department of Justice announced that it has indicted BitConnect co-founder Satish Kumbhani, it has been revealed that the founder has disappeared from his country India.
In the latest development, SEC attorney Richard Primoff revealed that Kumbhani “has likely relocated from India to an unknown address in a foreign country,” In a court filing made Monday. He noted:
“Since November, the commission has been consulting with that country’s financial regulatory authorities in an attempt to locate Kumbhani’s address. At present, however, Kumbhani’s location remains unknown.”
As of now, Primoff asked U.S. District Judge John Koeltl to provide an extension till May 30, Bloomberg reported.
The US Securities and Exchange Commission had separately filed a lawsuit against the founder in September 2021 for defrauding retail investors out of $2 billion. Specifically, the regulator accused Kumbhani of selling unregistered securities via its Lending Program.
BitConnect claimed to be a cryptocurrency lending platform but was later revealed to be a high-yield investment program, a type of Ponzi scheme. Kumbhani and his colleagues asserted that the platform’s technology, such as “BitConnect Trading Bot” and “Volatility Software,” will result in higher profits and guaranteed results.
“Defendants falsely represented, among other things, that BitConnect would deploy its purportedly proprietary “volatility software trading bot” that, using investors’ deposits, would generate exorbitantly high returns,” the SEC had said at the time.
However, the exchange was paying the earlier Bitconnect investors with money that came from later investors, claiming that it came from profits generated via its lending platform. At one point, BitConnect Coin, the native token launched by the exchange, ranked in the top 10 in terms of market capitalization.
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