A Ponzi scheme is a fraudulent investing scam that promises investors high rates of return accompanied by quite minimal risks. Fundamentally, the Ponzi scheme tricks new investors to make payments which are used to generate returns for the older investors. It is a scheme that operates in a way quite similar to the pyramid scheme considering that in both cases the new investors are used to pay the earlier backers.
In the U.S, Bitconnect Ponzi scheme is a ‘dead dragon’. However, its ghost continues hovering in India resulting in great mayhem. Shailesh Bhatt, a Bitconnect investor is currently under police custody after the Ahmedabad Criminal Investigation Department (CID) arrested him over the forceful extortion of about 2,000 bitcoin from promoters of the cryptocurrency-powered pyramid scheme.
The wallets and bank accounts of the firm won’t be spared either since the authorities have said that they will be launching further investigations. It is not only in India that the firm has succeeded at establishing its presence. Reports indicate that it has also expanded its footprint in the U.S, Singapore, Hong Kong, Vietnam and Indonesia. The authorities have disclosed that they have identified a number of accounts associated with the transactions and are making efforts to intimate respective banks about it.
Reports from the CIDs
CIDs looking into the case already have the nephew of the arrested Shailesh Bhatt at hand who is currently being investigated on the matter. They say the nephew has helped them with their investigations a huge deal after confessing that three Indian residents, Dhaval Mavani, Satish Kumbhani and Divyesh Darji are the principal operators of the scheme in the country.
The whole exercise hasn’t been in vain considering that 12 bitcoins have been recovered. Officials have stated that the project initially kick started in 2016 and that was as a crypto exchange.
They asserted that it took advantage of the trust and confidence it had gained from locals to further its activities. In 2017 the Ponzi scheme was fully operational and quite a significant number of investors had great hopes for high returns on investment.