Indian authorities have seized nearly $190 million in cryptocurrency as part of an extensive probe into the Bitconnect Ponzi scheme, a fraudulent investment platform that collapsed in 2018. The crackdown, led by the Enforcement Directorate (ED) in Ahmedabad, also resulted in the confiscation of cash, an SUV, and multiple electronic devices linked to individuals involved in the scheme.
The fraudulent scheme, which promised high returns to investors worldwide, is estimated to have defrauded 4,000 investors across 95 countries, causing total losses of approximately $2.4 billion.
Enforcement Directorate’s Seizure and Investigation
The ED’s operation, carried out on February 11 and 15 in Gujarat, led to the confiscation of cryptocurrency worth Rs 1,646 crore ($190 million). Officials also seized ₹13,50,500 (about $15,582), an SUV, and several electronic devices, which were allegedly linked to key figures behind the Bitconnect scheme. The agency confirmed the seizures in a statement:
“The Enforcement Directorate (ED), Ahmedabad, has seized cryptocurrency worth Rs 1,646 crore during its investigation into BitConnect cryptocurrency fraud in which numerous depositors were allegedly duped in the name of securities investment.”
Bitconnect was one of the most notorious cryptocurrency scams, founded by Satish Kumbhani in 2016. It attracted thousands of investors by offering high-yield returns, only to shut down suddenly in 2018, leaving victims without recourse. The U.S. Department of Justice indicted Kumbhani in 2022 for running a global network of promoters who lured in new investors in exchange for commissions.
Authorities believe that Bitconnect’s fraudulent operations extended to India, where funds were collected between late 2016 and early 2018. The Indian government has intensified its crackdown on illicit cryptocurrency activities, particularly schemes that exploit regulatory loopholes.
Victims Take Matters into Their Own Hands
The aftermath of Bitconnect’s collapse has led to desperate attempts by some victims to recover their lost investments. In one dramatic incident, investor Shailesh Babulal Bhatt allegedly resorted to kidnapping two of Kumbhani’s employees. According to the ED, Bhatt, along with accomplices, abducted the employees and forced them to hand over 2,091 Bitcoin, 11,000 Litecoin, and roughly $1.7 million in cash before releasing them.
Authorities arrested Bhatt in August 2024, charging him with kidnapping, extortion, and violations of anti-money laundering laws. His actions highlight the extreme frustration and financial devastation suffered by Bitconnect victims.
Meanwhile, the FBI’s Operation Level Up recently reported that it prevented nearly $285 million in crypto fraud-related losses between January 2024 and January 2025, underscoring the growing global effort to combat cryptocurrency scams.
