fbpx
Money

Indian Police Arrest Operators Of $2.6 Million Bitcoin Ponzi

Authorities in India have arrested two individuals accused of operating a bitcoin Ponzi scheme that swindled some 300 bitcoins, approx. $2.6 million in current prices, from 5000 victims.

The duo, alleged to be running a multi-level marketing (MLM) scheme that incentivized investors to lure in others into the scheme, promised high returns on bitcoin investments through a company called Bitmineplus. The company encouraged investors to deposit or buy bitcoin from the company, which it then held, to offer monthly returns as high as 12%, details from its still-functioning website reveals.

According to The Times of India, the platform began soliciting investments upon launch in December 2016 and, in addition to the 12% returns, offered 5% referral income for early investors with an additional 10% in commissions for bringing in additional people.

An investigating official said:

Their basic idea was to kick-start a multilevel marketing scheme involving bitcoins. The people were given monthly payouts and additional income for referring the scheme to more people.

After paying investors their returns in bitcoin initially, the company began offering dividends in ‘BMP’, its own custom-created cryptocurrency that offered no value. Eventually, the operators fled with their investors’ money before law enforcement caught up and apprehended the two individuals.

“Jangra [the mastermind behind the ponzi] had planned to shift his investors to his own cryptocurrency after getting a good sum of investment, but rising debt and the daily pressure from his investors made him flee with the money,” a senior police official said.

The company, which threw lavish parties at 5-star hotels to gain investors’ confidence, ultimately lured over 5,000 individuals for over a year before the scheme collapsed in February 2018.

“We have identified at least 5,000 IDs which have been duped,” Deputy Commissioner of Police (cyber Cell) Anyesh Roy said on Sunday, according to the Hindu. “For the first few months, the income came in but eventually, it stopped after which the investors started to ask questions.”

Cryptocurrency-related fraud continues to be prevalent in Asian countries with conmen justifying unrealistically high short-term gains by purporting to invest in cryptocurrencies.

Earlier this month, a major cryptocurrency-related ICO fraud in Vietnam saw authorities, including the office of Vietnam’s prime minister, crack down on a sweeping scheme that conned 32,000 citizens out of a reported 15 trillion dong, about $660 million. A similar nation-wide Chinese pyramid scheme purporting to be a blockchain platform swindled 80 million yuan ($13 million) from 13,000 investors earlier this year.

This story originally appeared in CCN.

Join The Discussion

700,000 Sign UK Petition To Stop Brexit And Stay In EU
700,000 Sign UK Petition To Stop Brexit And Stay In EU
New Zealand Begins Funerals For Mosque Shooting Victims
New Zealand Begins Funerals For Mosque Shooting Victims [Video]
Over 1,000 Feared Dead After Cyclone Idai Hits Mozambique
Over 1,000 Feared Dead After Cyclone Idai Hits Mozambique [Video]
Flash Floods, Earthquake In Indonesia Kill Dozens
Flash Floods, Earthquake In Indonesia Kill Dozens [Video]
Why Africa Continues To Lag Behind In Cryptocurrency Adoption
Why Africa Continues To Lag Behind In Cryptocurrency Adoption
Paris Blockchain Week Summit
Paris Blockchain Week Summit [Podcast]
Where The Funds Go On Crypto Exchanges And OTC Desks
Where The Funds Go On Crypto Exchanges And OTC Desks
Why Most Educated People Fail To Understand Bitcoin
Why Most Educated People Fail To Understand Bitcoin
Social Media Platforms Going Dark Should Be A Wake Up Call
Social Media Platforms Going Dark Should Be A Wake Up Call
Why You Shouldn't Put All Your Focus On Only One Social Media Network
Why You Shouldn’t Put All Your Focus On Only One Social Media Network
The Videos Your Customers Want To See On Social Media
The Videos Your Customers Want To See On Social Media? [Infographic]
5 Ways To “Trick” The Facebook Algorithm For More Engagement
5 Ways To “Trick” The Facebook Algorithm For More Engagement
10 LinkedIn Mistakes You Don't Realize You're Making
10 LinkedIn Mistakes You Don’t Realize You’re Making
Which Social Media Platform Should Your Business Use In 2019
Which Social Media Platform Should Your Business Use In 2019? [Infographic]
Snapchat To Launch Gaming Platform Next Month
Snapchat To Launch Gaming Platform Next Month
How Long Should A YouTube Video Be
How Long Should A YouTube Video Be? [Video]
6 Hottest Cannabis Products In 2019
6 Hottest Cannabis Products In 2019
10 Easy Ways To Be Healthier In 2019
10 Easy Ways To Be Healthier In 2019
9 Questions To Ask Your Network To Help You Find Your Path
9 Questions To Ask Your Network To Help You Find Your Path
What Is Your Therapist Listening For
What Is Your Therapist Listening For?
700,000 Sign UK Petition To Stop Brexit And Stay In EU
700,000 Sign UK Petition To Stop Brexit And Stay In EU
New Zealand Begins Funerals For Mosque Shooting Victims
New Zealand Begins Funerals For Mosque Shooting Victims [Video]
Apple Announces New iPad Air And iPad Mini
Apple Announces New iPad Air And iPad Mini [Video]
Over 1,000 Feared Dead After Cyclone Idai Hits Mozambique
Over 1,000 Feared Dead After Cyclone Idai Hits Mozambique [Video]