Cryptocurrency Scam Busted by Indian Police Forces

Crime, News | December 28, 2017 By:

A police task force in India has reportedly busted a gang targeting local people interested in trading bitcoin.

Earlier this month, the Uttar Pradesh Special Task Force (STF) arrested the mastermind behind the gang. The accused was identified as Mohd Azhad, alias Ashraf.

Triveni Singh, head of the STF’s cyber wing, said that at least seven more people in Ashraf’s close circles are suspected to be involved in the fraud. They are suspected to be college students who got involved in the fraud to make a fast buck.

The criminals allegedly created multiple accounts on cryptocurrency exchange Localbitcoins and offered to sell bitcoin in exchange for money sent via a bank transfer. The STF said they were flooded with multiple complaints based on the same operational method which prompted them to take action.

“There are sites where people can trade in cryptocurrency where both buyers and sellers are available,” said Singh. “The gang first lured traders to purchase the bitcoins at low prices and even transferred some into their e-wallets to win their trust. After this, the fraudsters got the original currency transferred into their bank accounts, opened on forged identities, when the traders demanded bigger amount of bitcoins. They disappear after withdrawing money from their bank account.

Two weeks ago, the Delhi Police Crime Branch also busted an interstate gang that allegedly duped investors by selling scam cryptocurrency called Kashhcoin. The gang allegedly promised a return of 10% for five years to their buyers, apart from the “shooting rate” of the cryptocurrency, which they claimed would soon cross the rate of bitcoin.

The swindling racket came to light when a Delhi-based businessman lodged a complaint with the police, claiming that he lost almost RS 14 lakh ($21,812 USD) that he had invested in Kashhcoin. The cryptocurrency, he said, was launched at a base price of RS 3.50 ($0.05 USD) per coin.