Critical risk level Prosecuted

BitConnect

Crypto lending platform that the SEC alleges defrauded retail investors of $2 billion; its founder was indicted and its top US promoter pleaded guilty.

Also known as: BitConnect Lending Program, BCC, BitConnect Coin

Type of scam

Ponzi and High-Yield Scheme

Jurisdiction

United States / India / United Kingdom

First reported

Feb 2017

Last known activity

Jan 2018

How this operation works

BitConnect offered a "Lending Program" in which investors handed over bitcoin in exchange for BitConnect Coin and were promised returns generated by a proprietary "trading bot" and "volatility software". Returns were advertised at around 1% per day, compounding. According to the SEC's complaint, filed on 1 September 2021 in the Southern District of New York, there was no trading bot. The SEC alleges that BitConnect and its founder Satish Kumbhani siphoned investor funds to digital wallet addresses they controlled, together with the platform's top US promoter, and that the programme was a fraudulent and unregistered securities offering that raised approximately $2 billion between early 2017 and January 2018. The US Department of Justice separately indicted Kumbhani in a global scheme it valued at $2.4 billion. Glenn Arcaro, BitConnect's US promotion director, pleaded guilty; judgment was entered against him and his company Future Money Ltd in December 2021. The platform recruited through a multi-level referral structure paying commission on deposits brought in by existing investors, which meant new deposits were the source of payouts to earlier ones. It shut its lending programme abruptly in January 2018 after receiving cease-and-desist orders from state regulators, and the token collapsed within days.

Warning signs people reported

Advertised returns of roughly 1% per day, compounding, with no losing days
Returns attributed to a proprietary "trading bot" that no investor could inspect or verify
Multi-level commission paid for recruiting new depositors
No regulated custodian; balances existed only on the platform
Abrupt closure of the lending programme following state cease-and-desist orders

Websites and domains

bitconnect.co Taken down

Offline since the lending programme closed in January 2018.

Other identifiers

Company registration

BitConnect Ltd (Claimed operating entity)

What this operation claims about itself

Recorded as claimed. The licence check below is what we were able to verify.

Company name given: BitConnect Ltd
Regulator named: None — presented itself as outside securities regulation

Licence check

No licence on record

The SEC's case is that the Lending Program constituted securities, that the offering was never registered, and that no exemption applied. Texas and North Carolina securities regulators issued cease-and-desist orders in January 2018.

Official warnings

Have you lost money to this operation?

File a claim and we will assess what recovery routes are realistically open to you. We will tell you plainly if we do not think recovery is achievable.

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