Indian Law Forces Nab Four in Relation to Cryptocurrency Fraud Scheme


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According to a July 5, 2019, report by The Times of India, State Crime Investigation Department (CID) has unearthed yet another cryptocurrency scam in Surat, India, which is estimated to have defrauded investors of more than $180,000.

Yet Another Indian Crypto Scam

The Catch-22 situation of cryptocurrency regulations in India has indirectly led to the rise of a slew of Ponzi schemes and frauds that prey on investors’ lack of knowledge about digital currencies.

In the latest of such cases, the Gujarat CID has arrested four individuals suspected of orchestrating a cryptocurrency fraud scheme. On July 4, 2019, Gujarat residents Vijay Prajapati, Dhiraj Patel, Kamruddin Syed, and Ashiq Shaikh were nabbed by the state CID concerning the “KBC Coin” scam. The Ponzi scheme’s promoters Baljeetsingh Lashkariya and Mohan Patel are absconding, the report notes.

Although the initial amount of the fraud was estimated to be around $180,000, sources close to the CID believe that the actual figure and the number of victims “are likely to be much bigger.”

Per the report, the perpetrators lured people into investing in KBC Coin with the promise of converting $0.0015 into $0.15 “in no time.” Such a tremendous price appreciation of 1,000 percent should have been an immediate red flag.

Gujarat CID official, Ashish Bhatia, said that promoter Lashkariya first solicited investments roughly two years ago. At the time, Lashkariya promised thousands of investors exorbitant returns for investing in the financial product.

The police state that Lashkariya actively promoted the Ponzi scheme in various parts of the Gujarat state, having opened branches in Palanpur, Mehsana, and Ahmedabad. Bhatia said:

“The value of KBC Coin never increased and within six months, the promoters went underground.”

Lack of Regulations to Blame?

It’s worth highlighting that this is not the first time that Indian law forces have arrested people for their suspected involvement in the KBC Coin Ponzi scheme. As reported by BTCManager in February 2019, Mumbai resident Pritam Patil – along with his close associates – was accused of duping about 12 investors of more than $250,000 via KBC Coin.

In the past, many other supposedly attractive investment products have been used as bait to lure innocent investors into doing away with their money. Fake cryptocurrencies will continue to defraud naive investors until crypto regulations become a reality in India.

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