Alleged BitConnect Crypto Scam Sees Head of Operation Divyesh Darji Arrested in Delhi
The alleged head of Bitconnect India, Divyesh Darji, was arrested this weekend at an airport in Delhi as he arrived from Dubai.
Darji and his conspirators allegedly stole millions of dollars from Indian investors interested in the infamous Bitconnect scam.
The arrest was reported by news.bitcoin.com, which described Darji as “the accused mastermind of the group in Asia.” Darji and his conspirators allegedly targeted Indian investors interested in purchasing cryptocurrency to protect their wealth during the country’s demonetization campaign.
Although Darji’s company was registered in the UK, he reportedly operated it from the Burj Khalifa tower in Dubai.
Indian investors were particularly hard hit by the notorious Bitconnect scam. In late 2016, the government demonetized all 500 and 1,000 rupee notes of the Mahatma Gandhi series. Overnight, India effectively made the decision to ban $10 and $20 bills. The decision was made in an effort to curtail the growing Indian black market. However, it led to cash shortages and severe economic problems. It also led investors to seek refuge with bitcoin and other cryptocurrencies – including Bitconnect.
Bitconnect arrived just in time for Indian investors to jump on board. It promised a safe haven during uncertain economic times. Bitconnect advertised itself as the next bitcoin: its value was significantly lower than bitcoin. It had a similar name to bitcoin. And it appeared to have the surging momentum.
Of course, Bitconnect was a complete scam. The pyramid scheme and Ponzi scheme collapsed in January 2018. While critics had called Bitconnect a scam from the beginning, investors didn’t realize the bad news until it was too late.
Since the collapse of Bitconnect in January 2018, we’ve witnessed the arrests of numerous high-profile Bitconnect members. India’s high-level Bitconnect promoters appear to have mostly left the country in January after reports that Indian authorities were investigating the case.
Indian celebrities and politicians, meanwhile, were also embroiled in the scandal. Satish Kumbhani, Dhavl Mavani, and Suresh Gorasiya are some of the alleged Bitconnect conspirators, for example.
In a statement reported by Financial Express, PG Nawade of the Gujarat police explained how the arrest took place:
“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. 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. The accused held seminars, events in India and other countries promising high interest — daily interest rate of 1 per cent — on investment in Bitconnect coins. The cost of one Bitconnect coin on January 16, 2018, when the company shut down, was USD 362.”
Darji’s Bitconnect scam company was reportedly registered in the UK but had an office in Surat. That company launched its own Bitconnect coin soon after India demonetized its currency. Darji later promoted the scam on social media and held luxurious galas across the country. Investors were lured to the scam with promises of 60% monthly returns on investment.
Gujarat police seized 169 bitcoins and 8kg of gold from Darji during his arrest.
Ultimately, a lot of people lost a lot of money during the Bitconnect disaster. It’s good to see some of the conspirators being brought to justice – although we still have no information about who was running the company. Bitconnect’s anonymous founders continue to be at large, likely enjoying their fortunes on some remote tropical island.