Another cryptocurrency scam has been exposed by Indian law enforcement. The Times of India reports four have been arrested with another on the lam, after being accused of defrauding investors of INR1 billion, or nearly $17 million.
The group was busted in Mumbai by local police for cheating investors in that city, as well as Surat, Gujarat and Uttar Pradesh. They’ve been accused of cheating, breach of trust and criminal conspiracy. Police may also consider invoking investment laws to harshen their penalty further.
They launched their own cryptocurrency, Cashcoin, in 2018, promising to double the investments of anyone who bought in. When those returns weren’t coming, a resident of Surat, Umeshchand Jain, lodged a complaint with law enforcement that he had been defrauded of INR10.2 million ($145,000).
Sunil Jadhav, an inspector on the case, said, “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.”
Investigators have determined that they siphoned the money by transferring it from the victim’s account to presumably one of their own in Uttar Pradesh. As a result, several bank accounts have been frozen to continue the investigation.
The accused’s lawyer insists that his clients are innocent. The defense right now seems to rest on not the absence of a fraud scheme, but rather that none of the laws cited against his clients apply to what they did.
This isn’t the first or even the largest crypto crime in India. A very similar fake crypto offering resulted in four arrests, after that group almost made off with $71.6 million.
If India is hoping to avoid future scams of their citizenry, they’ll need to get serious about cryptocurrencies rather than sitting on the fence. If the people of India don’t get a better education about the space, and better safeguards, this is bound to happen again.
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