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Law enforcement agencies are on the trail of individuals suspected of defrauding Indians of nearly $11 million, according to a report by Times of India.

The suspects allegedly defrauded investors by offering a 200% return on investments in their yet-to-be-launched virtual currency. Authorities said the suspected fraudsters used several methods to win the trust of their victims, including the promise of luxurious vacations in Dubai.

Investigations also revealed that the scammers told investors that they were building an expensive office building in Dubai, and when a number of investors attempted to verify, they were shown buildings under construction. Another claim by the scammers that they were running a financial collective in Maharashtra turned out to be a ruse to appear legitimate.

Multiple events were also held to teach investors the fundamentals of blockchain technology and the future of the new asset class. Investors in the scheme told investigators that the suspects claimed that upon launch, the native token of the project would spike astronomically within days.

A fake website was launched purporting to show the value of investments and offered victims the chance to either convert their holdings to Bitcoin or liquidate them into their bank account. Multiple reports from victims say that all attempts to withdraw the funds failed, confirming their fears that the scheme was fraudulent.

“Despite knowing that most investors were putting their hard-earned money in the firm either through disposing off their savings or taking loans, they played with our emotions and succeeded in their mala fide intention,” read the complaint from one of the victims.

Investigators say that the organizers of the scheme have fled India, but a massive manhunt has been opened to apprehend them. India’s law enforcement agencies confirm a collaboration with Interpol and other regional security outfits to smoke out the perpetrators.

Another reason Indian regulators dislike virtual currencies

Indian regulators have sounded warnings over the dangers of investing in virtual currencies, and the latest scam incident will no doubt bolster the resolve in standing against the asset class. The Reserve Bank of India (RBI) has previously declared its intention to impose a blanket ban on virtual currencies, but the Finance Ministry opted to impose stiff taxes to deter investors.

The RBI has issued multiple warnings against virtual currencies over “potential economic, financial, operational, legal, customer protection and security related risks.”

Finance Minister Nirmala Sitharaman stated that the country is eyeing a 46% adoption rate for blockchain, but virtual currencies are not on the books for the government, sparking worry for enthusiasts.

Watch: The BSV Global Blockchain Convention presentation, Sentinel Node: Blockchain Tools to Improve Cybersecurity

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