- A group of 4 out of 5 has been arrested for a suspected crypto scam. The police are still searching for the 5th suspect
- Victims lost $17,000,000 from the fraud
- The authorities are on high alert for fraudulent crypto behaviors
Police officers in Mumbai, India, have arrested a group of four people suspected to have been involved in cryptocurrency scam amounting to approximately one billion rupees (almost $17 million). The four individuals – Rajnikant Kumavat, Kirankumar Panchsara, Sanjay Sontakke, and Alpesh Barodia – were arrested on February 17th, and the police are looking for a fifth suspect named Ashok Goyal, who reportedly played a crucial role in the scheme.
These individuals have been accused of holding meetings in Surat, Mumbai, and parts around Gujarat, and intentionally lured other individuals into making investments with hard-earned cash, with a promise to double the investment. The group had launched a form of cryptocurrency known as Cash coin, quite similar to bitcoin, with the intention of cheating investors out of their money by promising doubled returns.
Classic ponzi scheme
At first, they paid out some of the investors to make their investment seem legitimate and lure more people in, and then they defaulted on the payment. Law enforcement officers have been freezing accounts around the country linked to the suspects and the transactions they conducted with Cash coin.
The complaint that led to the four arrests was filed by an individual residing in Surat who accused the suspects of defrauding him 10.2 million rupees (approximated $145,000). According to the reports submitted, the accused transferred the money from the complainant’s bank in Surat to an account in Uttar Pradesh.
The crimes listed against the accused by the local law enforcement include cheating, criminal conspiracy and a breach of trust, all classified under the Indian Penal Code and parts of Information Technology Act. Legal representation for the four people has claimed their innocence and said that the defendants have been wrongly accused and that the penal codes listed do not apply since the transactions that occurred were done in cheque.
Cryptocurrency raises significant security concerns since central banks and many state governments are still in the process of regulating this new industry. Money laundering and fraud are the main concerns when it comes to the issues of cryptocurrency, and lately, government officials have been on high alert to prevent and curb such crimes.