Business 14 November 2018

Erik Gibbs

Million-dollar crypto Ponzi scheme in India busted

A cryptocurrency Ponzi scheme operating out of India has now been stopped in its tracks. The Bangalore-based Ambidant Marketing and Investment Company, which was run by father and son team Syed Fareed and Syed Afaq Ahmed, allegedly targeted Muslim investors, promising huge returns in Halal investments. In actuality, it was nothing more than a ruse to scam investors out of their money.

The activity was uncovered by India’s Enforcement Directorate (ED). According to a statement by the organization, “During the investigation, it came to the fore that the scheme run by the company is surely a potential Ponzi scheme. In view of the above, ED has written to the RBI (Reserve Bank of India) to have another look into the matter and protect the interest of the investors/depositors at large who are being duped in the name of Islamic banking/halal investment.”

The investigation began as a review of information received from the Income Tax Department, which suggested that Ambidant was involved in forex (Foreign Exchange) trading. The ED then investigated several properties owned by the company this past January, which uncovered the activity.

The ED announcement added, “Several FEMA [Foreign Exchange Management Act] violations like forex trading… the opening of accounts abroad by a resident Indian without the permission of RBI, incorporation of a firm in Dubai without prior approval of Reserve Bank of India or Government of India came to the fore during the ongoing investigations in the matter. A complaint was filed in the matter in the case on [February 2, 2018] for the above mentioned violations under FEMA.”

The father-son duo promised huge returns on investments, up to 12% monthly in some cases. During the course of the investigation, the ED seized approximately $271,680. The investigation continues and it is possible that more assets will be confiscated before it is completed.

The ED further stated, “The money is collected through electronic mode/cheque/cash. However, they are neither registered with the RBI nor with the SEBI under their Collective Investment Scheme. From inception (on December 20, 2016) the company has so far received investment up to [$13 million] under various plans like Ultimate plan and Haj/Umrah plan. It is intriguing that returns to the tune of 10-12 per cent per month are being offered to the investors in the name of Islamic banking.”

No word was provided on whether or not the scammers were currently in jail or free on bond.

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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