Subhashchand Jewria is accused of diverting investor proceeds into his personal accounts and property.
The Mumbai Police's Economic Offence Wing (EOW) has cracked down on ATC Coin Ltd, the purported founder of cryptocurrency ATC Coin, and has registered a case against it for illegally collecting Rs 85 crore in five months.
Sources have told Moneycontrol the police is looking for Subhashchand Jewria for questioning, the founder and sole director of ATC Coin Ltd, for illegally diverting money raised from investors into his personal accounts and buying property with it. So far, the police have not been able to trace him.
A case has been registered under the Maharashtra Protection of Interest of Depositors Act against Jewria and ATC Coin Ltd.
The EOW has attached 28 banks accounts, and moveable and immoveable properties of ATC and Jewria, and has recovered about Rs 65 crore, which it is hopeful of giving back to investors in the company’s business.
ATC Coin Ltd was registered as a private limited company at Covent Garden, London with a paid-up capital of 1 pound in May this year. Sources in the police, however, say that the London-based registration address used by ATC Coin Ltd has also been used by about 10,000 companies, mostly shell firms.
The company seems to be offering mining services for users, as per its website. Information on other websites ATC Coin Ltd suggests mining activity is carried out under the multi-level marketing (MLM) model where users are incentivised to have new users signed up. Moneycontrol cannot independently confirm if these websites are affiliated with ATC Coin Ltd.
ATC Coin was offering 10 percent return per month with a lock-in period of 12-18 months, sources in the EOW told Moneycontrol but investors say the returns promised could be as high as 24 percent in a month.
Cryptocurrency mining is an activity that can undertaken by anyone and serves to settle transactions done in the digital currency – “bookkeeping for the coin network”.
As a reward, miners are offered a small amount of cryptocurrency. But mining can be a costly exercise, involving high-speed computing and consumption of power. This has led to opening up of companies that offer “cloud mining services” where users can rent the computing infrastructure of the company and pay a fee for the service.
As per ATC Coin Ltd’s website, ATC Coin is an open-source cryptocurrency built on the lines of popular cryptocurrency bitcoin. Trade in the digital currency began on June 25 this year at USD 0.08 (about Rs 5.5), as per Coin Market Cap. It shot up to USD 1.87 in September (nearly Rs 120) but since then, it has crashed to USD 0.54 (about Rs 35). Currently, the coin attracts market cap of USD 5.7 million (or Rs 37.5 crore).
The company was said to be luring investors (that is, miners into the MLM network) with premium gifts including foreign tour. It also claims ATC Coin can be used for buying products from Patanjali or online retailers such as Flipkart or Amazon.EOW will write to Patanjali asking whether it has any tie-up with ATC for accepting the cryptocurrency as a payment.