Major Arrest Made for Crypto Extortion Case Involving Approximately $147.84M Connected to Bitconnect Scam

• Shailesh Bhatt extorted 2,091 Bitcoins and 11,000 LiteCoins to recover his Bitconnect investment after the platform’s collapse.
• ED seizes ₹442 crore worth of assets linked to Bhatt’s extortion scheme involving cryptocurrency and real estate purchases.
• Bhatt distributed ₹289 crore of extorted funds among accomplices, further used to acquire gold and other assets, ED investigation reveals.

The Enforcement Directorate (ED) has arrested Shailesh Babulal Bhatt for his involvement in a large-scale cryptocurrency extortion case linked to the Bitconnect scam. Bhatt’s arrest, under the Prevention of Money Laundering Act (PMLA), comes after the ED’s investigation revealed his role in extorting 2,091 Bitcoins, 11,000 LiteCoins, and ₹14.50 crore in cash. 

The total value of these assets is estimated at ₹1,232.5 crore ($147.84M) . Bhatt had allegedly orchestrated these crimes to recover his investment in Bitconnect, a fraudulent cryptocurrency platform that collapsed in 2018.

Investigation into Bhatt’s Activities

The ED’s investigation into Bhatt began after the Surat Police CID filed two FIRs against Satish Kumbhani, the promoter of Bitconnect. Kumbhani lured investors, including Bhatt, to invest in the now-defunct cryptocurrency platform. 

When Bitconnect abruptly shut down in January 2018, leaving investors without their funds, Bhatt reportedly took matters into his own hands. To recover his lost investment, Bhatt allegedly kidnapped two employees of Kumbhani and extorted massive sums of cryptocurrency and cash as ransom. Notably, Bhatt’s actions were driven by his need to regain control of his substantial investment in the fraudulent scheme.

Details of the Proceeds of Crime

According to the ED, Bhatt did not act alone in this extortion scheme. The investigation uncovered that Bhatt distributed a significant portion of the extorted assets, valued at ₹289 crore, among his accomplices. 

These funds were subsequently used to purchase gold, real estate, and other valuable assets. Additionally, the ED has attached properties worth ₹442 crore in connection to the case. The agency continues to investigate the full extent of Bhatt’s financial dealings as part of its ongoing money-laundering probe.

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Enforcement Directorate’s Continuing Investigation

Bhatt’s arrest is part of the ED’s broader effort to crack down on financial crimes linked to cryptocurrency fraud. The ED has stated that its investigation into Bhatt and his accomplices remains active. 

This case highlights the ongoing risks associated with cryptocurrency investments, particularly in platforms like Bitconnect, which enticed individuals with promises of high returns only to collapse suddenly. However, the ED’s actions demonstrate its commitment to tackling such fraudulent schemes and holding those responsible accountable.