Head of BitConnect Asia Arrested in Delhi

Avi Rosten

In another twist in the saga of Asian cryptocurrency scams, the alleged head of operations for the failed cryptocurrency BitConnect has been arrested in Delhi.

Arriving in Delhi Aiport on Saturday, August 18th, local media report that Divyesh Darji, a vocal promoter of the BitConnect platform and coin, was detained by immigration officials.

Gaining enormous popularity in December 2016 with the launch of its initial coin offering, Bitconnect saw its market-cap reach an enormous $2.6bn, before being exposed as little more than a Ponzi scheme and the largest scam in the cryptocurrency industry.

With the value of the coin collapsing in January 2017, Darji was a notable proponent of Bitconnect in India and Asia more broadly, and was linked to several scandals including the alleged extortion of 2,000 bitcoin from investors in the ill-fated Bitconnect coin.

Police reported that 169 bitcoins and 8kg of gold were seized as part of the investigation, and in a statement to the Times of India, Ashish Bhatia of Gujurat CID explained:

The company was registered in the UK and had an office in Surat. They launched their own ‘bitconnect coins’ soon after demonetization. They promoted the company on social media and by holding gala functions in cities across the world. They lured investors with 60% monthly interest, and incentives in the form of ‘referral interest.

With the BitConnect project gaining substantial traction in the Indian market, the collapse and exposure of the scheme led to significant disenchantment with cryptocurrencies in general in the country.

While Asian scams seemingly continue apace - with three Chinese citizens arrested today in the latest scam to plague the continent - many will hope that this latest arrest attests to authorities’ growing efforts to clamp down.


Featured Image Credit: "Scam" by "Nick Youngson" via Alpha Stock Images; licensed under "CC BY 3.0"

Weekly Newsletter

Bitpoint Reveals Breakdown of Funds Stolen and Pledges Reimbursement After Hack

Neil Dennis

Japan's Bitpoint cryptocurrency exchange has published a breakdown of the assets lost in this month's security breach where hackers stole around Y3 billion ($28 million), and has pledged to reimburse customers.

A document published by parent company Remix Point on Tuesday showed that of the Y3.02 billion stolen, Y2.6 billion belonged to customers, while Y960 million were company-owned assets.

Here's the full breakdown:

  • Bitcoin BTC1,225 - total stolen worth Y1.53 billion at the time of attack: Y1.28 billion belonging to customers and Y250 million to the exchange
  • Bitcoin cash BCH1,985 - worth Y70 million at time of attack: Y40 million customer owned and Y30 million exchange owned
  • Ether ETH11,169 - worth Y330 million at time of attack: Y240 million customer owned and Y90 million of exhange's
  • Litecoin LTC5,108 - worth Y500 million, with about Y40 million in customer funds
  • XRP28,106,323 - worth Y1.03bn at the time of attack of which around a quarter were customer funds


Remix Point added in its Tuesday statement that it would reimburse customer losses, compensating them in lost cryptocurrencies rather than their fiat equivalent.

The exchange revealed on Sunday it had already tracked $2.3 million worth of stolen tokens. Reported by Finance Magnates Bitpoint said it had recovered the funds and reabsorbed them.

Bitpoint said last week's security breach occurred due to unauthorized access to private keys of its hot wallets and now intends to move all holding into cold storage, where no breaches of security had been detected.

Co-operation With Regulators

Remix Point said in the document published on Tuesday that it was co-operating with self-regulatory body, the Japan Virtual Currency Exchange Association, to help establish better security measures across the industry.

It requested the association, along with its exchange rivals, monitor any suspicious activity in the coming days that might involve the deposit of funds potentially associated with the incident.