India: Authorities arrest 11 in $5.3M Ethereum scam

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Law enforcement authorities in India have cracked down on an Ethereum scam that allegedly defrauded over $5 million from hundreds of unsuspecting victims. Ether Trade Asia was busted after authorities tracked down the leaders who had been hiding out in the western town of Lonavala. 

According to local reports, police from Nagpur city raided the residence in Lonavala where a gang of close to a dozen people and their families were staying.

“The gang was staying in a duplex with friends, families and others. Wives and children of many were present when cops zeroed in on the gang,” City Police Chief Amitesh Kumar said in a press briefing following the early morning raid.

After the dramatic raid, authorities seized gold, $25,000 in cash, high-end vehicles worth over $130,000, laptops and cellphones, a firearm and seven live cartridges. 

Police also arrested four people connected to the Ethereum scam—Nishid Wasnik and his wife Pragati, Sandesh Lanjewar and Gajanan Mungune.

Using the information, they had gathered from the first raid, the authorities conducted a second raid a day later and arrested a further seven alleged accomplices. 

The police said Wasnik was the leader of the entire operation. He has been on the run from authorities for the past five years now, having begun scamming investors through digital currencies as far back as 2017. 

Wasnik conducted several seminars where he preached the opportunities that digital currencies present, according to reports. He would then direct the investors to purchase Ether through Zebpay, a local exchange, and then instruct them to send it to wallets controlled by Ether Trade Asia.

According to the police, while they pledged to trade the Ether and earn the investors massive profit, Wasnik and his cronies used the funds for their own benefit.

“On the website, the gang projected a notional benefit to each investor, but siphoned off their Ethers to benefit Wasnik and his aides. Wasnik and his gang seemed to have transferred huge numbers of Ethers to some other site or monetized them to support his lavish lifestyle,” Commissioner Kumar told the media.

So far, the police have identified 172 people who all claim to have been duped by Wasnik and his gang, cumulatively losing $500,000. However, the authorities believe that the total sum of the stolen funds exceeds $5.3 million.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple, Ethereum, 
FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.