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Bitcoin Scams and Ponzi schemes in India

November 10, 2017 17:16
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With the increased popularity of Bitcoin in India and around the world, it comes with its own problems and controversies. The biggest problem is lack of information and impatience. Before you invest in Bitcoin, or any other cryptocurrency, take the time to understand what you’re investing in. Do not invest in something you do not understand.

According to Factor Daily, Amit Bharadwaj, a Delhi based entrepreneur has been running the biggest Bitcoin based Ponzi scheme in India. He is the CEO of GainBitcoins, an investment scheme that guarantees 10% monthly returns for 18 months. So, you’d end up having a profit of 80% after 18 months. But if you’d directly invested in Bitcoins back in January, you’d have a profit of over 700%.

But that was not the only problem. GBMiners does the mining operations in China, which controls over 2.1% Hashrate according to Blockchain.info.

The company moved on to more ventures and created MCAP Tokens. MCAP tokens were valued at $5 during the ICO and miners were given an option to accept the payout in the form of MCAP tokens. But a few months back, the users were no longer given a choice. The payouts were only in the form of MCAP tokens.

But the biggest fraud is in the valuation of MCAP. The company values MCAP token many times higher than the market price. Here’s the interesting part from FactorDaily pointed out:

1 MCAP token is fixed at a a price of 0.00215 BTC irrespective of market price of BTC. So 1 BTC equals 465.12 MCAP. The MCAP tokens can be converted to BTC in a couple of places. MCAP.exchange, the company’s own exchange. You can set sell orders between 5 to 15 MCAP only and the market still has hundreds of pending orders. So good luck selling there!

The only other place you can sell MCAP is C-CEX, which is an open market. On C-CEX, MCAP is valued at just $0.93. So, MCAP given by the company for 1 Bitcoin is worth just $465, which is roughly 15 times lower than the market rate if they’d paid out in Bitcoins, the way they were supposed to.

The company is not worried about unhappy customers. They’ve already moved onto new schemes. This time it is Ethereum and an investment plan for 24 months.

GainBitcoin is not the only scam in India. A lot of Cryptocurrency based scams have been rampant in India.

Cryptocurrency is an amazing avenue to invest in. But make sure you take the time to learn what you’re investing in. It will be worth it. Do not lose your money to false hopes and impatience.


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