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Different cryptocurrency scams are spreading everywhere. But in India, the local authorities were able to arrest individuals accused of using a bitcoin Ponzi scheme. According to local media, they were able to steal around 300 bitcoins that are worth around $2.7 million dollars. More than 5000 victims have been scammed.

Bitcoin Ponzi Scheme Closed

It is important for cryptocurrencies and the community to close down these kind of scams. If virtual currencies want to be legitimized, users will have to be aware of these crypto scams and warn the local authorities.  

This is what happened in India. Two individuals were running a multi-level marketing campaign that attracted investors believing in high returns on bitcoin investments. The company behind the scam was called Bitmineplus that encouraged individuals to buy bitcoins through the company and receive monthly returns as high as 12%.

The platform promised important returns for those who decided to bring additional people to the scheme. Per each referral brought to the platform, the company was giving an additional 10% commission.

An investigating officer commented about that:

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

As mentioned before, the company as able to convince 5,000 people. At a certain time, the owners stopped paying returns in bitcoins and offered their investors a cryptocurrency called BMP. They decided to use a similar strategy as BitGrail owners to re-pay customers for the loss of their funds.

According to Deepak Jangra, one of the individuals implicated in the business, said that he got the idea from ‘gainbitcoin.com’ in 2016. The owner of this website was also arrested by Pune crime branch.

Cryptocurrency Scams

The industry is receiving important investors and support from different governments. But these situations that involve scams and other strategies to steal investors money are not good for the environment.

Governments and financial institutions will start to regulate bitcoin and cryptocurrencies very hardly. This will not allow the space to innovate and keep growing at fast rates. Blockchain technology, is also helping enterprises and governments to improve the way they operate.

Investors need to operate in a regulatory framework that will allow them to feel safe that their investments and funds are safe. Without this requirement, the industry will be harmed and severely affected.

It is important to always warn local authorities about these scams and these situations that take place in the crypto sphere.

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