Cryptocurrency Ponzi scam worth Rs 500 crore busted in Mumbai

Bitcoin took 834 days to reach past $1,000 from the time that BitStamp started to track the price in August 2011. It was another 1270 days to surpass the $2000 mark on May 20, 2017. However, the price surged in the latter half of 2017, crossing successive $1,000 milestones with ever increasing speed on its march toward the $11,000 mark. The move up from $10,000 to $11,000 took less than 12 hours, stoking concerns that a rapidly swelling bubble could be set to burst in spectacular fashion. Here are some facts that you might not know:

The crime branch busted a cryptocurrency ponzi racket on Monday and detained their helmsman in connection with a fraud that is estimated to be around Rs 300 crore to Rs 500 crore.

As per a report from The Times of India, The police were able to get their hand on Tah Kazi, the prime technical support staffer at the company, who orchestrated the fraud, while the five others have absconded including the firms’ director Amit Lakhanpal.

Lakhanpal launched its own cryptocurrency called Money Trade Coin (MTC) and promised customers ten-fold returns in next 5-6 months.

Cryptocurrency is a virtual currency designed to work as the medium of trade or exchange.

The fraud was carried out by Flinstone Group, where its employees, posing as innovators, lured in customers. The police have raided their Thane office at Orion Business Park, Ghodbunder Road on Monday. The company made promises of returning the investment with 10 to 20 times returns in next six months. Some investors were bribed into making investments after promising them Swiss account or citizenship in the Caribbean.

The crime branch will also carry out raids at company’s other office in Kailas Industrial Park in Vikhroli. They are still examining the extent of this company’s operation in India and if there are any international links.

The investigation began after a Delhi-based businessman Pravin Agrawal and other victims lodged a complaint. DCP (crime) Abhishek Trimukhe said, “We have registered the offence at Chitalsar police station. The accused were trading a cryptocurrency, called Money Trade Coin, and duped several people.... it is too premature to reveal anything.”

“Primary probe revealed that the company initially marketed hard to spread the word about MTC and once people fell in the trap, the Lakhanpal-led group floated several schemes. Those who invested in the schemes were told to get more investors,” said the officer. “This way, several people were lured to invest and later, when they asked about the interest, the company gave evasive answers.”

The police have registered a case under many relevant IPC sections such as cheating, forgery, criminal breach of trust, besides Maharashtra Protection of Interest of Deposition Act, 1999, and also Information Technology Act.