Cryptocurrency Scam Worth Billions Busted In Thane; Over 25000 People Duped

The Thane Crime Branch has been investigating an alleged cryptocurrency scam worth billions. About a year back, a group of people floated their cryptocurrency called ‘Money Trade Coin (MTC).’ They then lured investors allegedly using fake documents, and on the promise of 10-20 times returns.

According to its website, MTC is described as intellectual property jointly owned by Dubai based firm Bitcoin Global FZE, UAE and Money Trade Coin Ltd, UK. Moreover, Mr. Amit M. Lakhanpal is Director of Money Trade Coin Ltd (and one of the key members of Bitcoin Global FZE and MD of Flintstone Group (a real estate firm), India).

Around 25000 people reportedly invested about Rs. 5 billion in this cryptocurrency. “Pal and his associates promised investors a 20-times return on investment in a mere six months. However, once the deadline passed, the company made several excuses not to release the money” a police officer said as reported by the Hindustan Times

Police crackdown

The incident came to the limelight when a complaint was filed by one of the investor Pravin Agarwal, a New Delhi based businessman, that they were no longer getting any response from the company about their investment.

Based on the complaint the police have raided the Flintstone group office in Thane and Mumbai. The police seized 53 laptops, rubber stamps, and fabricated documents during the raids.

The police have subsequently arrested a technical expert Taha Kazi from Mumbra, in links with the Flintstone group. While the mastermind behind the scam, Amit Lakhapal, is still at large and suspected to have fled the country fearing legal action.

A police officer, who wishes to be anonymous, told the Hindustan times said that the scam involves a unique software, which is tough to decode. He further adds that “The software will lead us to various people linked to the accused. Technical experts are trying to decode it.”

As reported by NDTV, the case has been registered under various Indian Penal Code sections for cheating, forgery, criminal conspiracy, criminal breach of trust and relevant provisions of the Maharashtra Protection of Interest of Depositors Act, the Chit Funds Act, and the Information Technology Act.

Reserve bank on cryptocurrency

The Reserve Bank of India (RBI) on several occasions have warned about the perils of virtual currencies. The RBI in its circular to the banks dated June 5, 2018, barred the usage of cryptocurrency of any kind in India.

The statement reads thus “Reserve Bank has repeatedly cautioned users, holders, and traders of virtual currencies, including Bitcoins, regarding various risks associated with dealing with such virtual currencies. Given the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time.”

Supreme Court stay

Many cryptocurrency firms and organizations have moved to high courts against the RBI circular. The Delhi High Court on April 22 issued a notice to Reserve Bank of India, the Union of India through Secretary, Ministry of Finance and GST Council, reports The Hindu Business line.

Meanwhile, the Supreme Court on May 22 refused to put a stay on the RBI circular. While hearing on the writ petition filed by Siddharth Dalmia along with other similar petitions filed in the SC, a three-judge bench headed by the CJI ordered that no high court will entertain any petition relating to the RBI circular on ‘Prohibition on dealing in Virtual Currencies,’ reported inc42.com.

The matter is still sub-judice, and the next hearing is adjourned to July 20.