Exit Scam in Wonderland: Bitconnect's Tentacles From Texas to Gujarat

Silver Miller's first class action complaint was filed on behalf of six defrauded Bitconnect investors in late January, just weeks after the Texas Securities Commissioner issued an emergency cease-and-desist order against Bitconnect for the selling of unlicensed securities.

Bitconnect is alleged to have run a global Ponzi investment scheme as of late 2016 that enlisted multi-level affiliate marketers through a referral program that rewarded them for luring investors to purchase Bitconnect native tokens on the Bitconnect BCC exchange, using either Bitcoin or fiat currency.

On Feb. 23, a Surat-based builder by the name of Shailesh Bhatt charged into the office of Gujarat state home minister Pradipsinh Jadeja and claimed that 10 Amreli-district cops had kidnapped and extorted him for 176 BTC, worth 9.45 crore* rupee.

"The FIR has been filed on the basis of evidence found by the team so far. In his application, Shailesh Bhatt had mentioned the transfer of 200 Bitcoins worth 12 crore rupee from the digital wallet of his business partner, Kirit Paladiya. Another 32 crore rupee were allegedly paid for their release from a farmhouse. Later, 78.5 lakh rupee [$108,872] were allegedly paid to get the Bitcoins back. All these transactions mentioned in the application could not be proven."

In parallel to emerging details of this quagmire of police corruption, the now-infamous extortion case made an about-turn when Bhatt himself was accused of an earlier - and even more explosive - extortion of a staggering 1.55 billion rupee worth of crypto and cash at gunpoint - including around 2,400 BTC - from two colleagues of a local Bitconnect promoter, Satish Kumbhani.

As CID's Bhatia has reportedly stated, Kumbhani of Surat "Floated" a company called Bitconnect and "Lured people like Bhatt to invest for huge returns. Bhatt ended up investing 2 crore rupee in BitConnect [token]. However, its promoters shut shop in January 2018 and went underground."

In apparent vengeance against those responsible for the Bitconnect heist, Bhatt and nine others are said to have posed as local tax officers and kidnapped a small-time Bitconnect employee named Piyush Savaliya on Jan. 30.

" , Bhatt's men kidnapped Dhaval Mavani at gunpoint [who was] also attached with the bankrupt firm BitConnect.

Another chargesheet floating around, which was also filed by the Gujarat CID in July, alleges that when the accused policeman themselves got wind of Bhatt's earlier crimes, they themselves met on Feb. 15 at a hotel in Ankleshwar in Surat to conspire to silence him and prevent him from lodging his complaint at the Home Ministry.

As the Times of India has reported, tracing the full extent of Bitconnect's tentacles in India - by which we mean pointing to a figure less wildly obscure than Gohil's benchmark bracket of anywhere between $726 million and $12.7 billion - brings a unique hurdle, in that many of its investors are accused of laundering their "Black" cash into the scam post-demonetization.