An Indian man allegedly kidnapped two men involved in the $2.4 billion BitConnect Ponzi scheme to recoup losses.
Shailesh Babulal Bhatt was an investor in BitConnect Coin, a token that is traded as the platform’s native cryptocurrency, according to statement From the Indian Enforcement Directorate, Bhatt, along with his accomplices, kidnapped two employees of BitConnect founder Satish Kombani to recover losses via ransom payments.
The BitConnect Ponzi scheme was introduced in 2016, disguised as a high-yield investment program, where investors were tricked into obtaining and lending BitConnect coins with the promise of earning up to 1% per day. The lending platform was advertised as being powered by a “BitConnect Trading Bot” and a “volatility program.”
But as with any Ponzi scheme, BitConnect’s operators paid investors returns using money raised from new investors. Over the course of two years, the scheme netted $2.4 billion from victims around the world, with the scheme and the token collapsing after U.S. regulators ordered it to stop.
According to the CEO’s statement, Bhatt managed to extort 2,091 BTC, 11,000 LTC, and around $1.7 million in Indian rupees from BitConnect employees, with the entire inventory valued at around $146.8 million.
Investigations revealed that his associates received $34 million, which they used to purchase “real estate, gold, and other assets.” The DEA seized $52 million in “movable and immovable property” related to the case.
Bhatt was arrested on August 13 under India’s Prevention of Money Laundering Act after he appeared before a court in Ahmedabad. Bhatt was investigated after two First Information Reports (FIRs) were filed with the state’s Crime Investigation Department in 2022. He was first arrested a month after the 2017 kidnapping.
The whereabouts of BitConnect founder Satish Kompany remain unknown, but over the years, some of the scheme’s main promoters have been charged. One of them was John Lewis Anthony Pigatton, who was convicted by the Australian Securities and Investments Commission in July 2024 of providing unlicensed financial advice.
Malaysian police have uncovered a similar crypto-ransom incident, arresting 14 people for kidnapping a Chinese national and a Malaysian woman and receiving $1.2 million in cryptocurrency as ransom.