A nephew of the man who ran an extortion scheme against BitConnect employees has been arrested, according to Indian authorities investigating the fallout from one of crypto's biggest frauds.
Nikunj Bhatt received 260 bitcoin from his uncle Shailesh Bhatt, who orchestrated the extortion after BitConnect collapsed in 2018. Shailesh Bhatt targeted two employees of the company, extracting 2,091 bitcoin, 11,000 litecoin and 14.50 crore rupees. After paying accomplices roughly $34.4 million, he spent the rest on real estate, gold and other assets.
Shailesh Bhatt landed in custody in August 2024. Nikunj and another suspect, Sanjay Kotadiya, were arrested and brought before a special court on January 20, according to reporting by the Press Trust of India. The Enforcement Directorate (ED) secured custody of both men through January 24.
The ED argues Nikunj Bhatt still holds knowledge critical to the investigation: cryptocurrency wallet credentials, private keys and exchange account details. According to statements he gave under Section 50 of the Prevention of Money Laundering Act, Nikunj admitted receiving the 260 bitcoin from his uncle. He transferred 19.99 bitcoin to a Binance wallet and returned 240 bitcoin to Shailesh Bhatt within days.
Authorities seized 10.92 bitcoin from the Binance account through the Surat Crime Branch. The remaining amount vanished in trading losses on the exchange.
The ED noted that Nikunj attended meetings where the kidnapping and extortion conspiracy took shape. He also accompanied his uncle during the actual extortion operations and later received a cut of the cryptocurrency proceeds.
The ED has released no details about Kotadiya's alleged role.
BitConnect itself was a massive MLM crypto Ponzi scheme run by Satish Kumbhani. When it imploded, it had defrauded consumers of at least $2.4 billion. Kumbhani fled before the collapse and remains at large, wanted by both Indian and US authorities. His whereabouts are unknown.
The BitConnect collapse triggered a cascade of criminal fallout. First came Shailesh Bhatt's extortion scheme against the company's own employees. Now authorities are working through the money laundering network that followed, with family members helping move and hide the stolen cryptocurrency.
🤖 Quick Answer
What happened to Nikunj Bhatt in connection with the BitConnect extortion case?Nikunj Bhatt, nephew of BitConnect extortionist Shailesh Bhatt, was arrested by Indian authorities and brought before a special court on January 20. He allegedly received 260 bitcoin from his uncle, who had orchestrated an extortion scheme extracting 2,091 bitcoin, 11,000 litecoin, and 14.50 crore rupees from BitConnect employees after the platform collapsed in 2018.
How did Shailesh Bhatt carry out the BitConnect extortion scheme?
Following BitConnect's collapse in 2018, Shailesh Bhatt targeted two company employees, extorting 2,091 bitcoin, 11,000 litecoin, and approximately 14.50 crore rupees. After distributing
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Satish Kumbhani