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Is There A Link Between BitConnect and GainBitcoin Scams? Crypto-News India Finds Out

August 20, 2018 15:51
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Earlier this year, fraudulent cryptocurrency company Bitconnect was ordered to shut down by the Texas government. Now it has emerged, that Bitconnect India head has been arrested from Delhi.

Commenting on this development, P G Narwade of Criminal Investigation Department (CID-Crime) of Gujarat police said, “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 (Sunday). 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.”

A source who is familiar with the matter but wished to remain anonymous said, “Divyesh Darji had launched a coin called Dekado during his association with BitConnect. He is not merely a promoter but he is the partner in the company. This fraud is worth over Rs 88,000 crore.”

Dekado coin started off, priced at $0.1 and then the price shot up to $18.

In a shocking twist, he further added that Ranjeet Saxena, one of Amit Bhardwaj’s closest aides, was also a part of the BitConnect scam. Ranjeet Saxena has been named as an accused in a First Information Report filed from Kolkata in the GainBitcoin case. On being asked about the whereabouts of Saxena the source said, “He is currently living in Dubai.”

Although there is no concrete proof of Ranjeet Saxena being involved with BitConnect or Dekado coin scam, there is a Change.org petition making the rounds on the Internet. Again, this hints at culpability, but it is not exactly proven.

Interestingly, this case is being clubbed together with the other cryptocurrency racket that was unearthed in Gujarat when a businessman Shailesh Bhatt accused 11 policemen from Amreli, of abduction and extortion of bitcoin. Financial Express reported that  Bhatt himself was later booked for allegedly extorting cryptocurrency and cash worth over Rs 155 crore at gunpoint from two men who worked for Satish Kumbhani, one of the promoters of BitConnect.

Bhatt too had invested in BitConnect, but lost money when Kumbhani and others wound up the firm. Subsequently, Bhatt and his accomplices abducted Kumbhani’s former employees and forced them to transfer over 2,400 Bitcoins into Bhatt’s digital `wallet’ (account), the CID alleged. When this information emerged, Kumbhani and other BitConnect promoters came under the CID’s scanner. In January this year, Kumbhani and other promoters suddenly closed the exchange and became untraceable.

The source revealed to Crypto-News India that combining the total value of the three scams: GainBitcoin (Rs 96,000 crore), BitConnect (Rs 88,000 crore) and MTC scam which was headed by Amit Lakhanpal in Pune (Rs 50,000 crore) came to Rs 2,20,000 crore. He further added that if the government were to tax 30% of this amount, it would be a substantial amount (nearly equaling a state’s GDP).

If there are new scams in cryptocurrencies coming to light every second day, why can’t the government do something to curb this menace? Despite, evidence of fraud, why do these websites continue to run, generating revenue which is tantamount to ill-gotten gains?

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