Business 8 January 2019

Erik Gibbs

Fourth suspect arrested after major crypto theft in India

A cryptocurrency scam in India that saw around $71.6 million stolen through a fake crypto offering early last year has now found a fourth accomplice arrested. According to a report yesterday in The Indian Express, Delhi police arrested Rohit Kumar for his involvement in the scam that centered on the Money Trade Coin (MTC), which was offered, but never listed on any crypto exchanges. 

The arrest came after police received a complaint from a resident of Kanpur. Kumar is allegedly involved with Amit Lakhanpal, the mastermind behind the scam and the CEO of a real estate firm. According to an unidentified police source, “The accused had set up office in Delhi’s Vikram Nagar and used [it] 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 police assert that the group falsely inflated the price of MTC in order to attract larger investments. The price of the coin subsequently fell and investors were unable to unload their assets. The group was previously accused of criminal conspiracy, cheating and banning last month.

The group, led by Lakhanpal, led high-profile public events in Dubai, some of which were attended by the state’s royal family. Police assert that, as Dubai began to embrace crypto, the scammer took advantage of the softening in order to attract investments. They add, “They accused also showed prospective clients an article in an international magazine, which claimed that one of the royals was his partner.”

Lakhanpal reportedly even posed as a member of India’s Ministry of Finance (MoF) and claimed that MTC maintained offices in Malaysia, the UK, Singapore and Italy. He also led investors to believe that they could purchase property in Dubai with crypto and that his coin was going to be approved by the MoF.

The latest arrest gives India another reason to keep suppressing the crypto industry. There have been reports that the country could introduce its own state-backed digital currency and that lawmakers are working on regulations to govern the space. However, there seems to be more activity to keep crypto out of the hands of residents instead of embracing the currency. As 2019 is expected to see a substantial amount of positive movement for digital currencies, perhaps this will be the year that the country recognizes the legitimate role crypto plays in a global economy.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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