In this series of three articles, we bring you the full story about BitConnect, one of the biggest crypto scams ever. You will read about its origin, its rise, and its fall. The full story includes kidnappings, money laundering, and deaths.

Surat, India. Where it all began.

The origin of BitConnect: When and where did it begin?

On 8 November 2016 the government of India announced the demonetization of 2 popular banknotes, the ₹500 and ₹1,000. 

To break the grip of corruption and black money, we have decided that the ₹500 and ₹1,000 currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016“ is a direct quote from the TV speech held by Narendra Modi (Prime Minister of India). 

As you can imagine the demonetization had a big impact, as shown on the front page of the ‘The Times of India’ on 9 November 2016:

(The front page of The Times of India, 9 Nov 2016)

In the months before the demonetization the rumor of the new ₹2000 banknote already hit the streets, and pictures started showing online.

We also found several reports of politicians blaming the Prime Minister that the demonetization was leaked before it was announced. 

Laundering money

In response to the demonetization, laundering (black) money became a thriving business and many different methods were used. Examples of these methods were: asking family or friends to exchange money for you (if they did not exceed the maximum exchange amount themselves), or employers paying their employees a half-year salary in advance in cash. 

Different tricks being shared to convert black money to white. Infographic by Times of India

During these turbulent times some people in Surat, India came up with the idea to start a cryptocurrency, named BitConnect.

The creators of BitConnect

It all started in Surat, India. With a population of 4.4 million, Surat is the eighth largest city in India. After demonetization, Divyesh Darji, the ‘head’ of BitConnect India, hired Dhaval Mavani to start developing a website for the cryptocurrency Ponzi scheme BitConnect. A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors.

When launching a platform like BitConnect, you need initial funds to operate the scheme and get more people involved. Satish Kumbhani, co-owner of BitConnect, starts looking for local investors in Surat, promising extraordinary returns. At this point, Shailesh Bhatt gets involved. He invests 2 crore, which is the equivalent of ~280.000 USD.

This is the start of a viral campaign for BitConnect. They have the funds required to keep the first investors happy. They then also invite more people from their own network, which spreads virally due to people getting a 7% ROI on referrals. Later, Sita Ram Gurjar & Mahendra Chaudhari also join in on the venture

The BitConnect payout structure as seen on the BitConnect website

Here you can see the organizational structure of the BitConnect scam. It consists of the founders, staff, early investors & others. You can see who was kidnapped, and the different roles everyone had in the organization:

An overview of the BitConnect hierarchies

Before we dive more in-depth, let’s talk about what BitConnect actually is.

What is BitConnect?

BitConnect is one of the most famous scams in ICO history. It was an open-source cryptocurrency connected to a high-yield investment program which turned out to be a Ponzi scheme. 

The original BitConnect website

BitConnect was released in 2016 with the aim of enabling users to lend BitConnect coin value in return for interest payments while also assisting with system security. BitConnect was promoted as a tool for financial stability.

The following is an extract from the BitConnect Lending Platform information and instructions:

“BitConnect lending: You can invest BitConnect coin in BitConnect lending platform exclusively from the BitConnect Dashboard. This investment option involves profiting from BitConnect trading bot and volatility software. You will receive daily profit based on your investment option. Upon investment term completion, you will receive your CAPITAL BACK to take out from the BitConnect lending platform or optionally reinvest back in lending platform to continue receiving daily profit.”

BitConnect’s goal was to become a distributed and autonomous way of earning cryptocurrency for individuals. According to the administrators, “BitConnect is not a corporation.” Many groups, however, emerged using the name BitConnect, designating well-known promoters as directors.

BitConnect (BCC) rose from a post ICO price of $0.17 to an all-time high of US $463 in December 2017.

Source: worldcoinindex.com

In the next article, we will elaborate on the rise of BitConnect and dive deeper into BitConnect promoters. We stumbled upon deaths affiliated to BitConnect and the infamous Carlos Matos speech, which you can see below!

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  1. Please ensure that Trevon James, Craig Grant, Nick Trovato,Ryan Hildreth are covered as major enablers of this scam

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