Bitconnect Head Divyesh Darji Arrested in India

BitConnect’s chief for the Indian market, Divyesh Darji, was arrested this Saturday on arrival from Dubai, the Times of India reported. The news arrives a few weeks ahead of the scheduled hearing of Trevon James, the most vocal proponent of BitConnect for western investors. BitConnect is the most notorious scam in the crypto space, becoming more prominent after Bitcoin (BTC) prices started picking up in the summer of 2017, increasing the cost of its BCC coins.

BitConnect had a wide network of investors with opinion leaders and marketers in India making millions during the peak Bitcoin prices. It was advertised in large-scale events with on-stage shows, as well as through YouTube channels targeted at young Asian investors.

Darji was one of the prominent promoters of the crypto asset, along with Satish Kumbhani, Dhavl Mavani and Suresh Gorasiya. In India, BitConnect became popular after the aggressive government de-monetization, known as a war against cash.

India’s government has had a long-term plan to curb the grey economy in the country, leading up to a fast demonetization, which made some forms of paper money useless. In effect, the Indian government discouraged the usage of cash. This boosted the popularity of crypto assets, leading to widespread adoption of BitConnect. One of the most prominent cases was that of wide-scale developer Shalesh Bhatt, who invested significant funds in the pyramid scheme.

“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,” said Ashish Bhatia of CID crime.

The BitConnect BCC digital asset is no longer traded, with no new pricing information. For the last time, BCC traded around $0.67 on very thin volumes, hence millions of assets are held in wallets, currently obsolete. But social media is seeing talks of a reemerging of BitConnect in a new incarnation.

A series of tweets links the general slide in crypto markets with the fallout of BitConnect, suggesting that BitConnect gave value to the markets. Now, there are new community efforts to revive the very same brand:

https://twitter.com/rogerrokkk/status/1029818204162535425

BitConnect relied on regular purchases of the BCC asset for Bitcoin. While the price of BTC rose, it was easy for BitConnect to pay dividends in dollars. However, this January, as the price of BTC fell, BitConnect crashed within hours.

The fate of BitConnect pointed more attention to potential scams in the crypto space, most notably DavorCoin (DAV).

https://twitter.com/Mike_Houlden/status/1031255712435818496

DAV promised to alter its course and become a usable digital asset, but went on to be listed among dead coins.