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The Enforcement Directorate (ED), Ahmedabad, has seized cryptocurrency worth Rs 1,646 crore during its investigation into BitConnect crypto currency fraud in which numerous depositors were allegedly duped in the name of securities investment. The agency also seized Rs 13,50,500, an SUV and digital devices during the searches conducted in Gujarat on February 11 and 15.
In a statement issued on Saturday, the ED said that it had initiated its investigation under the provisions of the Prevention of Money-Laundering Act (PMLA) on the basis of FIRs registered by the CID Crime Police Station in Surat.
During the period from November 2016 and January 2018, the accused persons allegedly collected money from investors worldwide, including those from India, the ED said.
The founder of BitConnect, an unincorporated organisation, established a worldwide network of promoters, and gave them commissions. In order to “induce” investors to deposit funds in the form of cash and Bitcoins, into the purported lending program, BitConnect represented, among other things, that it would deploy a purported proprietary “volatility software trading bot” (Trading Bot) that, they claimed would use investor funds to generate returns as high as 40 per cent per month, the ED said.
The promoters posted “fictitious” returns on the BitConnect webportal that amounted to an average 1 per cent per day or about 3,700 per cent on an annual basis, the ED said.
These claims, the ED said, were a sham, as the accused knew that BitConnect did not deploy investor funds for trading with its purported Trading Bot, but rather, they siphoned investors’ funds for their own benefit by transferring those funds to digital wallet addresses controlled by them.
The ED said it examined the complex web of transactions carried in numerous crypto wallets to unmask the origin and controllers of said crypto wallets. It was found that many transactions were carried out through the dark web to make the transactions untraceable. However, by tracking numerous web wallets and gathering ground intelligence, the ED was able to zero in on the wallets and the premises where the digital devices containing said crypto currencies were available.
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Earlier, the ED, Ahmedabad, had attached movable and immovable properties worth around Rs 489 crore in the case.
The sources said foreign nationals also “invested” in BitConnect and the “main accused” is under probe by federal authorities in the US. Further investigation is underway.
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