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How Bitcoin investors in India got lured to BitConnect schemes and lost Rs 22,000 Cr

Bitcoin Bitconnect

Last year, cryptocurrency such as Bitcoin and Ethereum took the world by storm. In a span of twelve months, it rose from $900 to $20,000. It became a marquee attraction for investors and everyone suddenly wanted to ride on the high wave to get maximum profit out of it.
Indians, who were trying to come out of jerk of demonetisation, were looking for some lucrative deals. It was then BitConnect, a platform claimed to provide multiple investment opportunities, came out with 1% daily interest offer and a promise to double investors money in 100 days in exchange for Bitcoin. This attracted many bitcoin owners and investors.
Investors were asked to give away their Bitcoin to BitConnect, which issued them its own token currency called BCC, and made all principal and interest payments in BCC as well. BitConnect had a fixed number of BCC coins, whose value went up with demand.
However, experts had warned calling it a Ponzi scheme. But investors, with returns so high in mind, stuck with investment only to get shock in Jan 2018, when BCC crashed to $2 overnight. This resulted in investors getting worthless BCC.
Soon BitConnect announced it would shut down its cryptocurrency exchange and lending operation.
Most of the investors, who did not complaint about the development fearing enquiry from the government, lost bitcoins worth hundreds of crore. According to TOI report, most of the investors belonged to Gujarat.
Satish Kumbhani and other investors in Gujarat poured bitcoin worth $3.2 billion into Bitconnect, according to Ashish Bhatia, the lead investigator on the case for Gujarat’s Criminal Investigation, outlined Bloomberg report. The case has taken a political angle as many high profile names are reported to be involved in it. Former BJP MLA Nalin Kotadiya is also an accused in the case.
However, the government denied any link with the case and had instead cautioned people from investing in cryptocurrency.
This is not the first incident of a scam involving Bitcoin.
In April, a bitcoin scam came to the light, when Police arrested Amit Bhardwaj and his brother Vivek Bhardwaj, who owned GainBitcoin and GB mining ventures, from Bangkok.
They had floated many schemes and reportedly published advertisements in Media publications to push their schemes. They used to lure investors by promising 10 per cent of investment value each month for 18 months.
Following the Bhardwaj arrest, entrepreneur and angel investors Nikunj Jain and Sahil Baghla were also held on the grounds of having key connections with Bhardwaj and his company. The duo were allegedly a part of the conspiracy and working as partners with Bhardwaj.
In the last two years, cryptocurrency-based investments have been attracting the significant confidence of investors. According to Income Tax Department, more than $3.5 billion worth of transactions have been conducted via virtual currencies including Bitcoin.

Source: Entrackr

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