According to a report from the Indian Express, local police have successfully arrested Rohit Kumar, an associate of a group accused of conducting a cryptocurrency scam in which investors were duped out of their funds, totaling up to 5 billion rupees (roughly $71 million). The report confirmed that Kumar’s arrest was the fourth one made in connection with the ongoing case of the Money Trade Coin scam, which was uncovered a little over a year ago in Mumbai.

Bitcoin Jail

The Money Trade Coin

The police reported that the individual who started the scam is Amit Lakhanpal, the CEO of an India-based real estate firm. Lakhanpal is said to have launched and promoted a token known as the Money Trade Coin (MTC), but after multiple investigations were carried out, it was discovered that there was no such token listed on any cryptocurrency exchange.

Lakhanpal also performed a few functions and appeared in events in Dubai with the members of the royal family in attendance as well.

His perceived connections with the Arab royal family gave him some credibility as a businessman, which was why he convinced a large number of investors to stake their funds in the cryptocurrency. According to a local police officer who chose to remain anonymous, Lakhanpal also misled prospective investors by showing them an article in an international magazine, which claimed that his project had the support of one of the members of the Arabian royal family.

He also wooed investors with the prospect of purchasing homes in Dubai with the returns of their investment, and promised them that the Indian Ministry of Finance would soon approve the MTC.

A police source said:

“The accused had set up office in Delhi’s Vikram Nagar and used to collect money from investors promising high returns. Lakhanpal was earlier holed up in Dubai, and we believe that he may have fled to London.”

The company reportedly made artificial inflations of the token’s price to get more investors. Those who saw that the token was being even more lucrative were encouraged by the rising prices, and they kept pumping money into the scheme.

However, as the token’s price fell, investors were unable to sell their tokens. Eventually, hundreds of individuals were affected, and they registered complaints with the police, accusing the company and its management of criminal conspiracy and fraud.

India’s Torrid Crypto History

Over the past few years, India has been affected severely by a wide array of cryptocurrency scams. As a means of helping to prevent this, the government opted to impose strict regulations on the country’s cryptocurrency space. The Reserve Bank of India also published a circular banning the country’s commercial banks from providing financial services to crypto-based companies and operations.

However, a report by The New Indian Express confirmed that an inter-ministerial committee set up by the Indian government agreed to introduce proper regulations on crypto assets, with an aim of simultaneously making these assets legal in the country and countering the incidence of crypto-related financial crimes. According to the report, the committee has already met twice on the issue, and it is gearing up to present its report to the Finance Ministry by February.

Besides, the police force of the Indian states of Kashmir and Jammu released a public statement earlier this month, warning the general public against making investments in cryptocurrencies. Highlighting the fact that digital assets aren’t regulated by the government the police stated,
“The general public is informed not to make any type of investment in cryptocurrencies, virtual currencies such as Bitcoin because there is a real and heightened risk associated with them.”


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Posted by Jimmy Aki

Based in the UK, Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system. Follow him on Twitter: @adejimi


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