Police In India Arrests $2.6 Million Bitcoin Ponzi Scheme Operators

The Indian authorities have just arrested two individuals who were accused of operating a Bitcoin Ponzi scheme that swindled more than 300 bitcoins – which equals to approximately $2.6 million in current prices.

Even 5000 victims were fooled by the duo, who has been allegedly running a multi-level marketing (MLM) scheme that incentivized investors to lure in others into the same scheme. They promised high returns on Bitcoin investments through the company (named Bitmineplus) and encouraged people to deposit or buy Bitcoin from the company. In exchange for that, they held the money to offer monthly returns as high as 12% – which was a bubble that finally burst, leaving people without their money.

As the article published in The Times of India says, the platform run by the duo began soliciting the investments upon its launch in December 2016. Ever since then, it lured more and more investors to join and offered 5% referral income for early investors with 10% in commissions for bringing in additional people.

One of the investigating officials said:

“Their basic idea was to kick-start a multilevel marketing scheme involving bitcoins. The people were given monthly payouts and additional income for referring the scheme to more people.”

At first, the company paid investors their returns in Bitcoin. However, this was done only to lure more people in the scheme. They even faked a custom-created cryptocurrency which offered no value.

As the senior police officer who investigated the case said:

“Jangra [the mastermind behind the ponzi] had planned to shift his investors to his own cryptocurrency after getting a good sum of investment, but rising debt and the daily pressure from his investors made him flee with the money.”

The company even threw parties at 5-star hotels to gain confidence by more and more people. In the end, more than 5000 individuals were scammed for over a year before the scheme collapsed – in February this year.

Ever since February, the police has been investigating this issue and finally arrested the duo. This is only one of the many stories where people take advantage of the popularity of Bitcoin and cryptocurrencies – only to lure potential investors (with no knowledge about crypto at all) and steal their money.