Indian police taskforce cracks a cryptocurrency fraud ring

Chris Lee
Fraud warning on laptop

A special police task force in India has uncovered and tackled an alleged international cryptocurrency fraud ring.

The Special Task Force (STF) in the city of Bhopal said that it cracked what it described as a worldwide crime group.

Two of those arrested were from the Madhya Pradesh state in central India, while the alleged leaders of the group are from Malaysia and Hong Kong.

Between them, they are accused of persuading investors to buy “plus gold union coins”, which pose as cryptocurrencies – but which, according to Indian media, are in fact fake.

The alleged network is spread out across India, with nodes in many major cities. It is understood that some were located in the major global city of Mumbai, while there were others in the city of Jabalpur.

The server for the website they set up was located in Jaipur, in the state of Rajasthan.

The accused previously worked at a legitimate cryptocurrency firm. However, they allegedly decided to set up a criminal operation in November of 2017.

They then supposedly contacted customers from their previous place of employment and told them that they needed to move their information over to a new system.

However, according to police, the new system was fake – and while customers were able to log in to their online accounts as normal and observe what they thought was profit accumulation, this was in fact fake.

Two people have been arrested in connection with the alleged incident. Brijesh Raikwar, who is from Jabalpur, and his wife Seema Raikwar have been taken into custody.

It is understood that Seema Raikwar’s bank account received a deposit of 4 crore rupees, which is equivalent to approximately $578,000 USD or £455,000 or so British pounds.

Another man, Roopesh Rai, is now being hunted by police for his alleged role in the scam.

Police said that Brijesh Raikwar works as an electrician and an engineer. Rai, according to police, works as an air conditioning maintenance officer.

“So far we have been able to access the details of 100 investors, six of whom hail from MP [Madhya Pradesh], said Vinay Paul from the police department’s Special Task Force.

“It has been found that the fraud is worth Rs 10 crore, but the amount could well cross the Rs 50 crore market once the full database of investors located in servers situated at Jaipur is accessed.

“A total of six complaints were received in December 2018 and investigations into the complaint led us to this racket”, he added.

India regularly experiences problems with cryptocurrency fraud in various different guises.

Earlier this month, for example, someone who worked with a now out of business crypto investment scheme called BitConnect was accused of encouraging people to invest in the scheme under false pretences.

Divyesh Darji was accused of offering returns of up to 5,000% on investments for those who participated in the scheme, known as “Regal Coin”. Some individuals are believed to have lost cash equivalent to tens of thousands of US dollars.


Chris Lee

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