The intricately webbed story of Bitconnect scam unravels further as the Alleged India Bitconnect head, Divyesh Darji, got arrested. Darji was arrested this week by the Gujarat CID from Delhi airport as he arrived from Dubai. Under the bitconnect scam, he and conspirators have allegedly duped Indian investors of crores of rupees (Rs 88,000 Crore) in Bitcoin.
Inspector P G Narwade of Criminal Investigation Department (CID-Crime) of Gujarat police stated:
“Darji was living in Dubai. A look-out circular was issued against him. The Immigration Department alerted us when he was on the way from Dubai to Ahmedabad, after which he was arrested today evening. The company came into existence in 2016, and in 2017, it launched the BitConnect coin. It remained active till January this year. It released 2.80 crore coins, out of which 1.80 crore coins were sold to investors”
Narwade further added:
“The accused held seminars, events in India and other countries promising high interest — daily interest rate of 1 per cent — on investment in BitConnect coins. The cost of one BitConnect coin on January 16, 2018, when the company shut down, was USD 362.”
Ashish Bhatia, DGP of CID crime noted:
“The company was registered in the UK and had an office in Surat. They launched their own ‘bitconnect coins’ soon after demonetization. They promoted the company on social media and by holding gala functions in cities across the world. They lured investors with 60% monthly interest, and incentives in the form of ‘referral interest.’ This is the same company in which Shailesh Bhatt invested Rs 1.80 crore. To recover the money, he had allegedly kidnapped Dhaval Mavani and Piyush Savaliya of Bitconnect. He had extorted 2,019 bitcoins, 11,000 litecoins and Rs 14.50 crore cash. A case was then registered with the Surat zone CID crime. We recovered 169 bitcoins and 8kg of gold from the accused.”
As per an FIR filed recently, the third in the case being probed by the Surat unit of CID so far, the promoters of BitConnect collected Bitcoins worth Rs 1.14 crore from one investor before fleeing. The CID had claimed that employees at BitConnect’s Surat office admitted that promoters collected “crores of rupees from thousands of investors.”
The Bitconnect Scam India
The Bitconnect platform promised Big returns, Big gains but all its investor got was a very big fall. Though trade analyst red-flagged bitconnect from its initiation, the lure of high gains and to skip the effect of demonetization Indian investors blindly trusted this too good to be true Ponzi scheme.
In late 2016, when the Indian government demonetized all ?500 and ?1000 notes, the country experiences a shock wave. Though demonetization was an effort to strangle the growing Indian black market, it initiated a nationwide panic as every transaction was under scrutiny and the obvious cash crunch.
During all this crunch Bitconnect presented itself as the perfect solution. Investors happily jumped on to this wagon to discreetly put away their black money and to gain the impressive return of 1% daily from it as well. Early on, Bitconnect bullishly rose in its value and more and more investors got interested without observing the impending fall.
When the eventual collapse occurred, Bitconnect’s value hit rock bottom and investors were handed peanuts in return for their handsome investments. Assembling their gains, Indian promoters managed to escape abroad as Indian authorities launched an investigation. The mix had well-known personalities and politicians including Satish Kumbhani, Dhavl Mavani, and Suresh Gorasiya.