BitConnect Scam: India’s Authorities Arrest Former Politician over Alleged Bitcoin Theft

Nalin Kotadiya, ex-MP from India’s ruling party, is accused of orchestrating the kidnapping of one of BitConnect’s victims.

India’s police have detained Nalin Kotadiya, a former politician from the ruling Bharatiya Janata Party (BJP), due to his alleged participation in a Bitcoin (BTC) extortion case related to the $763 million BitConnect fraudulent scheme, local media reported over the weekend. Kotadiya was the mastermind behind the kidnapping of one of BitConnect’s investors, Shailesh Bhatt, and the stealing of over BTC 200 from the victim, according to the authorities.

Kotadiya has been on the run since May when the local court of Gujarat issued an arrest warrant on evading of justice grounds. The politician was a BJP member of parliament from 2012 until 2017 and a former Gujarat state’s party leader. After the BitConnect investigation started, Kotadiya has cut his links with the BJP.

“He [Kotadiya] was the planner of the whole thing. He brought Amreli police and Ketan Patel [policeman] on board and got extortion money,” Deepankar Trivedi, Deputy Inspector General of Ahmedabad’s Crime Investigation Department (CID), told the Indian Express.

The BTC extortion investigation started earlier this year after local Gujarat state officials had filed a complaint against Amreli district police for involvement in the abduction and theft of the Bitcoins from businessman Shailesh Bhatt. Bhatt was one of the investors in BitConnect, which promised 365% annual return for investments in BTC. The company, however, stopped paying dividends and Bhatt with other investors extorted several Bitcoins from the BitConnect exchange. However, after the extortion, Bhatt claimed that the police kidnapped and beat him, as well as stole around BTC 200 from his wallet.

Firstly, the local authorities had wanted to take testimony from Kotadyia, but he did not appear before the Ahmedabad CID, the central investigative police forces for Gujarat. The ongoing probe has found that Kotadiya was the main person in the extortion case. Two of the involved policemen, Anant Pate and Jagdish Patel, had been arrested and they are still in custody.

In July, India’s main opposition party, the Indian National Congress Party (INC), accused the BJP of trying to cover-up the BitConnect investigation due to Kotadyia’s role and his recent claims that he has evidence of BJP leaders’ involvement in the scam.