ED Arrests Two in BitConnect Crypto Fraud Case; ₹2,170 Crore Assets Attached

The Enforcement Directorate (ED) has arrested two accused in the multi-crore BitConnect cryptocurrency Fraud and an associated kidnapping-extortion case, officials said. The investigation has so far led to the attachment or seizure of assets valued at more than ₹2,170 crore.

The prime accused, Shailesh Babulal Bhatt, has already been taken into custody. The latest arrests were made under Section 19(1) of the Prevention of Money Laundering Act (PMLA), 2002.

Those arrested have been identified as Nikunj Pravinbhai Bhatt (33), a resident of Surat, and Sanjay Kanubhai Kotadia (49), a Mumbai-based individual. Both were produced before a special PMLA court in Ahmedabad, which granted the ED four days of custodial remand.

The arrests are part of a broader money-laundering probe into the BitConnectCoin scheme, widely regarded as one of the largest suspected cryptocurrency scams to have targeted investors across the globe.

FIRs Lead to ED Investigation

The ED initiated its probe based on two FIRs registered by the CID Crime Police Station, Surat, against Shailesh Babulal Bhatt, BitConnect founder Satish Kurjibhai Kumbhani, and others.

According to the agency, the accused induced investors to purchase BitConnect Coin, which was allegedly owned and controlled by Kumbhani and his associates. The collected funds were allegedly siphoned off and used to acquire real estate assets and cryptocurrencies.

BitConnect is suspected of running an unlicensed and fraudulent global cryptocurrency investment scheme through its so-called “Lending Programme” between November 2016 and January 2018, primarily targeting investors in India and several other countries.

Inflated Returns and Fake Trading Bots

The ED alleged that BitConnect falsely claimed to use a proprietary “volatility trading bot” capable of generating monthly returns of up to 40%. The platform reportedly displayed fabricated daily returns of more than 1%, amounting to nearly 3,700% annually.

Investigators stated that investor funds were never used for genuine trading activities but were instead transferred to digital wallets controlled by the accused and their associates. The scheme was promoted through a worldwide network of agents who earned commissions for onboarding new investors.

Kidnapping and Cryptocurrency Extortion Case

The second FIR pertains to an abduction and extortion case involving victims Piyush Savaliya and Dhaval Mavani. The ED alleged that they were kidnapped by Shailesh Babulal Bhatt and his associates to recover purported investment losses.

To secure the release of one of the victims, the accused allegedly demanded 2,254 Bitcoins, 11,000 Litecoins, and ₹14.5 crore in cash.

Role of the Arrested Accused

During searches conducted at five locations on January 9, the ED froze assets including shares, mutual funds, cryptocurrencies, and cash worth approximately ₹19 crore. Digital devices and incriminating documents were also seized.

As per the ED, Nikunj Bhatt received at least 266 Bitcoins across two cryptocurrency exchange accounts. Of these, 10.9 Bitcoins were directly linked to the extortion case. He allegedly laundered the remaining cryptocurrency through third-party accounts by converting it into USDT and Ethereum before transferring it across multiple wallets.

Investigators also found that wallets linked to Sanjay Kotadia received approximately USD 23 lakh (around ₹20.7 crore) for cryptocurrency trading purposes. Additionally, Kotadia is accused of receiving USD 4.5 lakh (about ₹4.05 crore) directly from Shailesh Bhatt.

Transactional links between the two accused were established through forensic analysis of seized digital evidence, officials said.

Asset Attachment and Ongoing Probe

The ED stated that both accused provided misleading or incomplete disclosures during questioning under Section 50 of the PMLA and were evasive in their responses. Their arrest was deemed necessary due to non-cooperation and concerns over evidence tampering or flight risk.

So far, assets worth more than ₹2,170 crore linked to Shailesh Babulal Bhatt and others have been attached or seized. The ED said further investigation is underway to identify additional beneficiaries and trace remaining proceeds of crime.