Another gang allegedly involved in cryptocurrency scam have been busted in India. According to the local news outlet, The Times of India, police officers in Mumbai have arrested a group allegedly involved in a crypto racket that scammed investors of an estimated billion of Rupees (around $15 million).
Same Scam, Different Gang
The gang used a model that is becoming way too frequent in India. Float a cryptocurrency, get investors to buy in by promising insane profits and disappear. The group had launched a cryptocurrency called “Cashcoin,” which was touted to investors as the next big thing, going as far as to promise them they could double their investments within two months of investing.
As Blockonomi reported in January, an Indian entrepreneur Amit Lakhanpal had floated a token known as Money Trade Coin (MTC). He then created a fake persona and linked his cryptocurrency with the Arab royal family so he could scam investors of over 5 billion rupees (about $71 million).
An investor who staked his money on Cashcoin but couldn’t get anything out of it, filed a complaint with the local police. Umeshchand Jain told local authorities about the racket, telling them he lost 10.2 million rupees (roughly $145,000) to the fraud.
The local police were quoted saying:
The accused held meetings in Mumbai, Surat, and other parts of Gujarat, and lured people into investing their hard-earned money by promising to double it in two months. Initially, the gang repaid a few investors to lure more people in and then defaulted. Their intention was to cheat.
Suspects Arrested, Accounts Frozen
Four members involved in the scam have been arrested by local police and their accounts have been frozen. The police crime branch unit is charging the suspects with cheating, criminal conspiracy and breach of trust.
Per the reports, the authorities have arrested Sanjay Sontakke, Rajnikant Kumavat, Alpesh Barodia, and Kirankumar Panchsara. Ashok Goyal, who allegedly masterminded the fraud, is still at large.
India’s Crypto Terrain
India is gradually becoming the crypto scam capital of the world. Hardly a month go by without the report of a crypto gang defrauding investors of their hard earned money. The government has been trying to sanitize the citizens about the dangers of investing in crypto assets, which shouldn’t be the case. Not all crypto assets are scams, tokens such as Cashcoin and MTC, which were created solely to defraud investors, are the ones the State should be worried about.
“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,” a statement from local police authorities had stated last month.
The banking industry has not been helpful either. Private banks in the country have been hostile to account holders who deal in cryptocurrencies, with the most recent threat coming from India’s second largest bank, Kotak Mahindra Bank.
The federal government is taking a more proactive approach to cryptocurrencies. Last December, an inter-ministerial committee set up by the Federal government agreed to introduce a regulatory framework that would make cryptocurrencies legal in the country, with the aim of nipping the incidence of crypto-related financial crimes in the country. The committee will present its report to the Finance Ministry this month.
