Ahmedabad, Jan 22 (NationPress) The Directorate of Enforcement (ED) has taken into custody Nikunj Pravinbhai Bhatt (33) and Sanjay Kotadia (49) as part of an investigation into a significant cryptocurrency fraud associated with the BitConnectCoin scandal, officials reported on Thursday.

The arrests occurred on January 19, under Section 19(1) of the Prevention of Money Laundering Act (PMLA), 2002, following a comprehensive investigation into fraudulent cryptocurrency investments and related money laundering activities.

Both individuals were presented before the Special PMLA Court in Ahmedabad on January 20, which approved a four-day custodial remand for the ED.

The ED's inquiry commenced based on two FIRs filed by the CID Crime Police Station in Surat against Shailesh Babulal Bhatt, Satish Kumbhani, and others.

The agency contended that illicit gains were amassed by enticing the public to invest in BitConnectCoin through a supposed “Lending Programme,” orchestrated by Kumbhani and his associates.

According to the ED, between November 2016 and January 2018, the accused engaged in deceptive and unregistered cryptocurrency offerings disguised as investments in BitConnect’s lending scheme.

Investors from both India and abroad were lured with promises of extraordinarily high returns—up to 40 percent per month—via a claimed proprietary “volatility software trading bot.”

To fabricate a false sense of legitimacy and growth, the BitConnect website displayed fictitious returns of around 1 percent daily, equating to nearly 3,700 percent annually.

However, the agency revealed that these claims were deceptive, as investor funds were never utilized for trading. Instead, the money was redirected for the personal gain of the accused and their associates by transferring it to digital wallets controlled by them.

During operations conducted under the PMLA on January 9, 2026, the ED executed searches at five locations, leading to the confiscation of digital devices and incriminating documents.

Assets totaling approximately Rs 19 crore, including investments in shares, mutual funds, cryptocurrencies, and cash, were frozen. The investigation further indicated that Nikunj Bhatt was involved in a separate crime related to the kidnapping and extortion of cryptocurrencies and cash.

From the extorted amount, Bhatt received at least 266 Bitcoins across two different exchange-linked accounts, of which 10.9 Bitcoins have been attached by the ED thus far.

Investigators discovered that at least 246 Bitcoins were laundered through various third-party crypto accounts to obscure their origin before being converted into Ethereum and USDT, then transferred to multiple wallets, including those associated with Sanjay Kotadia.

According to the investigation, Nikunj Bhatt transferred USDT valued at approximately Rs 20.70 crore to wallets linked to Kotadia for alleged cryptocurrency trading.

Additionally, Kotadia reportedly received USDT worth around Rs 4.05 crore from Shailesh Bhatt for trading activities. The ED alleged that both Bhatt and Kotadia did not cooperate with the investigation, made evasive and incomplete disclosures regarding the acquisition and use of cryptocurrencies, and attempted to hinder the probe by providing false and misleading information under Section 50(3) of the PMLA.

Due to concerns regarding the potential destruction of evidence and flight risk, the agency proceeded with their arrest. So far, the ED has attached and frozen assets worth approximately Rs 270 crore in this case, including properties and cryptocurrencies linked to Shailesh Bhatt and others.

Ongoing investigations continue to uncover the money laundering network and the involvement of additional suspects, officials stated.