Home News Bitcoin Hyderabad Police Nabs Fraudsters for Selling Cryptocurrency-Based Ponzi Schemes

Hyderabad Police Nabs Fraudsters for Selling Cryptocurrency-Based Ponzi Schemes

August 27, 2018 14:32
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All of a sudden, it is raining scams in India. Over the weekend, the Hyderabad police conducted a raid at a Secunderabad-based real estate firm, GRM Estates Pvt Ltd, and nabbed five scammers, including the mastermind, Gardesh Ramesh,  who is the founder of the company Coinx Trading, that was selling cryptocurrency-based Multi-level marketing (MLM) schemes.

Apart from that, the police also seized four sale deed land documents, nine mobiles, four ATMs, cash, two cars, and other properties that were worth $260 K (INR 1.8 Cr), reported Inc. 42.

The police report said, “The main accused Gardas Ramesh hatched a plan to gain illegal easy money started MLM business in the name of Coinx Trading (Cryptocurrency/Bitcoin) and luring gullible public with a promise of making them rich within a short period with high returns. Gardesh encouraged them to invest money in Coinx Trading which claimed to be registered in the US and the UK.” The report added that nearly 1200 investors had invested in the CoinX Trade Business. The victims have poured in nearly $1.43 Million (Rs 10 crore) in the MLM schemes.

After the story of GainBitcoin scam broke in April this year and Amit Bhardwaj’s subsequent arrest, there have been multiple scams that have followed this news.

Let’s take a look at some of the biggest scams unearthed (till date):

  • GainBitcoin Scam: Amit Bhardwaj and several of his allies conned a significant number of people (close to 20,000) to invest in his company GainBitcoin. The scam was this: You put in some bitcoin and after 10 months, receive 18% increment in the principle amount (in bitcoin). It all went south, when Bhardwaj refused to deposit the promised bitcoin and instead asked his investors to accept MCAP token (which was useless).
  • The MTC Token Scam- The scam was forged by The Flintstone Group, an alleged real estate firm, that promised investors with not only flats and high returns on investment but also African and Caribbean citizenships. The Flintstone Group’s cryptocurrency was termed as MoneyTradeCoin (MTC), which was used as a bait for investors to put in money with the lure of high returns and citizenships. The company also went into saying to investors that their cryptocurrency would be considered as legal tender in few years of time in all the African nations.
  • Gujarat Bitcoin Abduction Case– Gujarat Police booked 11 people, including policemen for extorting a businessman of his bitcoin in Surat. A Surat-based businessman Shailesh Bhatt accused a police inspector Anant Patel of abducting him and confining him at a farmhouse and forcing him to transfer 200 bitcoin from his mobile phone. In a classic case of tables being turned, Bhatt, himself was booked for extorting Rs 155 crore in cash and bitcoin. Around two years back, a Satish Kumbhani from Surat had floated a company called ‘Bit Connect’ and lured people like Bhatt to invest in it to get huge returns in short time. Bhatt had invested Rs 2 crore in it. However, its promoters shut shop in January this year and went underground. To recover his bitcoin, Bhatt had abducted an employee of BitConnect.

    Although this current trend of scamsters duping thousands of people is worrying, hopefully with the right deterrent, this trend will be nipped in the bud soon.

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