Kannur police’s investigation not just landed up in ponzi money scheme, but a cryptocurrency fraud

3 weeks ago 16
Mobile Application for your business
White Cloud

“The accused started selling the investors the idea of paying back in a cryptocurrency, Morris Coin, despite not having any authorisation to do so,” Kannur police official said.

When Kannur police launched an investigation months ago, they were under the impression that they were chasing a racket involved in cheating using a run-of-the-mill ponzi money chain scheme.

But when the accused eventually arrested earlier this week, by which time they had allegedly cheated in excess of ₹100 crore, it emerged that they had even invoked the facade of cryptocurrency after a point.

“The ponzi scheme in the name of a Bengaluru-based company had gone bust and then they started selling the investors the idea of paying back in a cryptocurrency, Morris Coin, despite not having any authorisation to do so. We are increasingly hearing about frauds invoking cryptocurrency,” said P. P. Sadanandan, Assistant Commissioner of Police, Kannur.

Cryptocurrency is fast becoming that enigma, the investment potential about which almost all have heard while very few have any clue about how to reap its benefits. And that gray area seems to be opening up immense potential for fraudsters to tap into.

To put it very simply, Cryptocurrency is a computer generated and stored currency with a highly volatile virtual value operated using blockchain technology. There are numerous cryptocurrencies, which investors can purchase, trade, and encash directly using dedicated mobile applications. However, not having the physical backing of a regulator in India like in the case of conventional currency seems to be holding up conventional investors leaving the space largely to ambitious ones not averse to taking risks.

“Even though not regulated in Indian market, cryptocurrency has got huge investment potential. Its market cap has went up over the last few years bringing in huge profits. So, if regulated, this can be a huge investment portfolio for the common man,” said Nandakishore Harikumar, a cyber security expert who runs a startup in that domain.

He, however, said that frauds using cryptocurrency as a facade is also rising in proportionate to its rising profile as an investment instrument. In many cases, it even descends to the level of multi-level marketing where fraudsters collect investments from unsuspecting people in the name of cryptocurrency and then simply vanish, said Mr. Harikumar.

Then there are the informed investors who jump in convinced of its immense potential and do their own bidding. “I started dabbling in stocks and then turned to cryptocurrency after learning about it from my friends who had made a windfall. My instinct about investing in cryptocurrency is pretty straight forward. Notwithstanding the risk factor, cryptocurrency is the future compared to the ever dropping value of conventional currency and assets,” said Abish Puthusserry, a software engineer.

Read Entire Article