The BitConnect founder, accused of $2.4 billion in fraud through a Ponzi scheme, could not be served with court documents because his whereabouts are unknown. This comes from an filing SEC.
A federal grand jury in San Diego indicted Satish Kumbhani on February 25.
The Commission filed a civil suit against him, BitConnect, former director Glenn Arcaro and affiliated company Future Money in September 2021. The SEC alleged that the group ran a fraudulent and unregistered securities offering through the BitConnect lending program.
In a February 28 filing, the regulator said that at that time it did not know the whereabouts of Indian national Kumbhani. The defendant is believed to have left the country.
“BitConnect is an unincorporated organization through which the Commission must press its claims via its operator — Kumbhani,” the agency added.
Since November, the SEC has been consulting with Indian authorities in an effort to locate the defendant’s address.
The Commission asked the judge to extend the deadline for serving the complaints by 90 days—to May 30, 2022. The regulator noted that it could take longer and, by precedent, the court may grant it.
In January, the Southern District of New York handed down a sentence against Glenn Arcaro and Future Money. Under the ruling, they were permanently barred from participating in ICOs and certain marketing campaigns. Earlier, the former director pleaded guilty to fraud for involvement in BitConnect and agreed to return $24 million that he earned from the scheme.
BitConnect was accused of running a pyramid scheme in January 2018.
As of 2017, the whereabouts of Ruja Ignatova, founder of the major fraudulent crypto project OneCoin, have remained unknown, with losses estimated at up to $4 billion.