Scammers in Himachal Pradesh minted a series of cryptocurrencies (two of which were KRO and DGT), defrauding thousands of investors of more than 2 billion in five years starting in 2018, the year crypto reached fever pitch rupee.
The alleged gang members lured people with promises of high returns on cryptocurrency investments within a short period of time and built a network of investors.
The original investors were then lured into engaging others in the Ponzi scheme.
The matter was raised in the Vidhan Sabha by independent MP Hoshyar Singh, who estimated that people in Kangra and Hamirpur districts alone were cheated of over Rs. . 2 billion rupees.
After Singh delivered his rally speech, a special investigation team was set up to investigate the matter.
Northern Range Deputy Superintendent of Police Abhishek Dhullar, in-charge of SIT, told PTI on Monday that the exact amount of the scam has not been ascertained.
Five people have been arrested on suspicion of fraud, but the main culprit remains at large, police said.
He said the frauds used a combination of misinformation, deception and threats to maintain control of their schemes and continue to extract funds from unsuspecting investors by manipulating the price of the tokens.
The first coin they launched was the “Korvio Coin” or KRO Coin.
They charge buyers an initial activation fee and promise them great returns. Over the course of five years, the scams used three to four cryptocurrencies.
Cryptocurrency is a digital currency designed to be used as a medium of exchange through a blockchain-based computer network and does not rely on any central authority (such as a government or bank) for support or maintenance.
Once their accounts were activated, police said investors were encouraged to recruit more members to join the scheme.
Criminals adopted a Ponzi scheme model – an investment scam in which returns are paid to early investors from capital invested by new investors rather than from any legitimate profits.
Investors are encouraged to continue recruiting new members, which creates a cycle in which newly invested funds are used to pay returns to early investors. These initial investors received generous returns and became brand ambassadors for the program.
Scammers set up fake websites to list their coins and manipulate their prices.
They later launched a new coin called “DGT Coin”. When enough people buy these tokens at a higher price, their price is deliberately depressed, creating a huge pull.
The defendants launched new tokens and investment programs under different company names, such as “Hypenext” and “Aglobal.” Police say every time a new coin is launched, it is marketed as another investment opportunity.
According to the police, they have received 50 complaints of such fraud this year alone.
SP Cyber Crime Rohit Malpani said that during the investigation, the police found that the modus operandi of these scams was similar and the names involved were also common.
Since then, five people have been arrested and charged in connection with the fraud and eight others have been investigated, police said.
Superintendent of Police Sanjay Kundu told Press Trust of India (PTI): “We are on the verge of nabbing the kingpins of cryptocurrency scams in Himachal Pradesh and have mapped their assets and are conducting financial investigations. “
“My advice to people is don’t fall prey to cryptocurrency scammers,” he said.
The cryptocurrency market has seen several disruptions in the past few years, including the famous Squidward scam of 2021, in which coin manufacturers were reportedly defrauded of $23 million (approximately Rs. 190 crore).
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Svlook
