Ahmedabad | The Enforcement Directorate (ED), Ahmedabad, has arrested Nikunj Pravinbhai Bhatt (33) of Surat, Gujarat, and Sanjay Kotadia (49) of Mumbai in connection with a large-scale cryptocurrency fraud case involving the BitConnect platform and other crypto-related schemes. The arrests were made under Section 1(1) of the Prevention of Money Laundering Act (PMLA), 2002, officials confirmed.
The investigation was initiated by the ED based on two FIRs filed by the CID of Surat Police, which also named other accused, including Shailesh Baboolal Bhatt and Satish Karjibhai Kumbhani. One FIR alleged that Satish Kumbhani and his associates induced members of the public to invest in Bitcoin through the BitConnect platform, diverting funds to accounts owned and controlled by Kumbhani. The investigation also revealed that the proceeds were misused to acquire Bitcoins and immovable properties.
According to ED officials, the accused operated the alleged scheme between November 2016 and January 2013 (reporting timeline anomaly reflects case documents) by offering unregistered cryptocurrency investments to investors across India and abroad. BitConnect, a non-registered organisation, established a global promoter network and incentivised them with commissions for recruiting investors.
Victims were persuaded to deposit funds in cash and Bitcoin, with the promise of extremely high returns. The scheme falsely claimed deployment of a proprietary “Volatility Software Trading Bot,” which allegedly generated up to 40% monthly returns on invested funds. To substantiate the fraudulent returns, the BitConnect website displayed fictional gains averaging 1.5% daily or 3,700% annually. These claims were deliberately misleading, as the accused never used investor funds for actual bot-based trading. Instead, the funds were moved to digital wallet addresses under their control for personal enrichment.
A second FIR alleged the forcible extortion of cryptocurrencies and cash. Shailesh Baboolal Bhatt and associates kidnapped Piyush Sawliya and Dhaval Mawani, demanding 2,254 Bitcoins, 11,000 Litecoins, and ₹145 crore in cash for Dhaval Mawani’s release. ED investigations confirmed that Nikunj Bhatt was a key accomplice in this extortion. Of the recovered Bitcoins, Nikunj Bhatt held 266 Bitcoins across two crypto exchange accounts, of which 109 Bitcoins have been seized by the ED.
Certified Cyber Crime Investigator Course Launched by Centre for Police Technology
Further inquiry revealed that Nikunj Bhatt transferred at least 246 Bitcoins through third-party crypto accounts, converting them into Ethereum and USDT, before moving these to multiple wallets linked to Sanjay Kotadia and other individuals. The investigation also found that Nikunj Bhatt had transferred approximately 23 lakh USDT (₹20.70 crore) to Sanjay Kotadia-linked wallets for trading purposes. In addition, at least 45 lakh USDT (₹4.05 crore) recovered during extortion was routed to Kotadia by Shailesh Bhatt.
As part of the PMLA investigation, the ED conducted raids at multiple locations on January 9, 2026, seizing digital devices, incriminating documents, and investments in shares, mutual funds, and cryptocurrencies, along with cash totaling ₹1 crore. Forensic analysis of seized devices revealed crypto transaction data and exchange records, demonstrating links between the accused and the laundering network.
During interrogation under PMLA provisions, both Nikunj Bhatt and Sanjay Kotadia provided misleading and incomplete disclosures regarding possession, utilisation, and status of the seized cryptocurrencies. Despite multiple opportunities, both accused attempted to obstruct the investigation by giving false or evasive statements, as per ED sources.
Considering the risk of evidence destruction and potential flight, the ED presented Nikunj Bhatt and Sanjay Kotadia before the Special PMLA Court, Ahmedabad, on January 20, 2026, which remanded both in ED custody for four days.
ED officials noted that Shailesh Baboolal Bhatt, a primary accused, had already been arrested, and the agency has attached assets worth approximately ₹2,170 crore so far. Investigations remain ongoing, focusing on tracing additional crypto wallets, cross-border transactions, and the full extent of the financial network.
This case highlights the growing complexity of cryptocurrency fraud and digital asset laundering, where perpetrators exploit global networks, unregulated platforms, and sophisticated digital channels to misappropriate investor funds. Authorities have urged investors to exercise caution, thoroughly verify crypto platforms, and report any suspicious digital financial activity immediately.
With multi-state and international dimensions, coordinated ED action remains crucial to bringing offenders to justice and recovering assets defrauded by large-scale crypto fraud networks.
