Himachal Pradesh Crypto Scam: Investors Swindled Out Of Rs 200 Crore, Mastermind Still At Large

While five individuals have been apprehended in connection to the fraudulent activities regarding KRO coins, the main orchestrator remains at large, according to law enforcement.

The scheme commenced with the launch of 'Korvio Coin' or KRO coins, requiring buyers to pay an initial activation fee with promises of substantial returns. ( Image Source :Getty )

In Himachal Pradesh, a group of individuals engaged in fraudulent activities involving cryptocurrencies, allegedly swindling more than Rs 200 crore from numerous investors over a span of five years, commencing in 2018, a time marked by a surge of interest in cryptocurrencies. The suspects, accused of being part of a criminal syndicate, enticed individuals with promises of high returns within a short timeframe by encouraging investments in KRO and DGT coins. They adopted a Ponzi-style scheme, enticing initial investors to recruit others into the scheme. The alarming scale of the deception was brought to light in the Vidhan Sabha by Independent MLA Hoshyar Singh, estimating the amount pilfered in Kangra and Hamirpur to be over Rs 200 crore, as reported by PTI.

Following Singh's disclosure in the assembly, a special investigation team was assembled to delve into the matter. The precise sum of the fraud is yet to be determined, as Deputy Inspector General of Police, Northern Range, Abhishek Dhullar, who leads the SIT, informed PTI. While five individuals have been apprehended in connection to the fraudulent activities, the main orchestrator remains at large, according to law enforcement. Employing a combination of misinformation, deceit, and coercion, the fraudsters exerted control over their scheme, manipulating coin prices to extract funds from unsuspecting investors.

Their scheme commenced with the launch of 'Korvio Coin' or KRO coins, requiring buyers to pay an initial activation fee with promises of substantial returns. Over the course of five years, they introduced and utilised three to four cryptocurrencies. Cryptocurrency operates as a digital currency functioning via a blockchain-based computer network, free from dependence on any central authority like the government or banks. Once investors activated their accounts, they were encouraged to draw in more participants, following a Ponzi scheme pattern where returns were paid to earlier investors from capital supplied by new investors rather than genuine profits.

Investors were incentivised to continually recruit new members, perpetuating a cycle where new investments funded returns for prior investors. The initial investors gained significant returns, effectively becoming advocates for the scheme. The perpetrators fabricated counterfeit websites to list their coins and manipulated their prices. Subsequently, they introduced a new coin called 'DGT Coin.' After a sufficient number of people purchased these coins at elevated prices, the price was deliberately dropped, resulting in a significant loss for investors. The culprits introduced additional coins and investment plans under various company names such as 'Hypenext' and 'Aglobal,' each time marketing them as fresh investment opportunities.

The police have received 50 complaints about such fraudulent activities this year alone. During their investigation, they discovered similar modus operandi and common names associated with these frauds, as stated by SP Cyber Crime Rohit Malpani. Consequently, five individuals have been arrested and charged in connection with these scams, leading to the filing of eight FIRs, as reported by the police. Director General of Police Sanjay Kundu stated that they are on the verge of apprehending the masterminds of cryptocurrency scams in Himachal Pradesh, having identified their assets and initiated financial investigations. He cautioned the public against falling victim to cryptocurrency fraudsters.

The cryptocurrency market has witnessed several rug-pull incidents in recent years, including the infamous 2021 Squid coin scam, where the coin creators allegedly absconded with $23 million.

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