Himachal Pradesh witnesses massive Crypto rug-pull scam worth over Rs 200 Crore

The city of Shimla is facing an ongoing issue as the police struggle to apprehend a cryptocurrency fraud kingpin who has allegedly swindled thousands of people across Himachal Pradesh since 2018. During that year, the cryptocurrency craze reached its peak, making it the perfect cover for the gang’s fraudulent activities.

The Fraudulent Scheme

The fraudsters operated by promising high returns on cryptocurrency investments within a short timeframe, enticing unsuspecting individuals. They established a network of initial investors who were then encouraged to recruit more people, resembling a Ponzi-style scheme.

Alarming Scale of the Scam

Independent MLA Hoshyar Singh raised the alarm about the extent of the scam during a session in the Vidhan Sabha. He estimated that in just Kangra and Hamirpur alone, victims had lost over 200 crores. The magnitude of the fraud led to the formation of a special investigation team (SIT) to look into the matter.

Uncertain Financial Loss

Determining the exact amount defrauded remains a challenge, as Deputy Inspector General of Police, Abhishek Dhullar, who leads the SIT, explained. The criminals employed a combination of misinformation, deception, and even threats to manipulate their victims into handing over their hard-earned money. Their tactics included manipulating cryptocurrency prices to continue extracting funds from their victims.

The Birth of ‘Korvio Coin’

The fraudsters began their operation by launching ‘Korvio Coin’ or KRO coins, requiring buyers to pay an initial activation fee while promising substantial returns. Over the course of five years, the scammers dabbled with three to four different cryptocurrencies.

Understanding Cryptocurrency

Cryptocurrency is a digital form of currency that operates on a decentralized blockchain network, independent of any central authority like governments or banks. It’s designed for secure and efficient transactions.

Expanding the Web of Deception

Once investors’ accounts were activated, they were encouraged to bring more individuals into the scheme, perpetuating the cycle of deception. The criminals relied on the Ponzi scheme model, where returns to earlier investors were funded by capital contributed by new investors, rather than legitimate profits. The initial investors were lured in with substantial returns and became promoters of the fraudulent scheme.

Fake Websites and Price Manipulation

The fraudsters went to great lengths to deceive their victims, creating fake websites to showcase their coins and manipulating their prices to their advantage. This made it seem like a legitimate investment opportunity.

The Rise and Fall of ‘DGT Coin’

The scammers later introduced a new cryptocurrency called ‘DGT Coin.’ Once enough people purchased these coins at higher rates, the price was deliberately crashed, causing significant financial losses for unsuspecting investors.

Changing Identities

To further avoid detection, the accused kept introducing new coins and investment plans under different company names, such as ‘Hypenext’ and ‘Aglobal.’ This constant rebranding allowed them to continue their fraudulent activities under different guises.

Increasing Complaints

The police have been inundated with complaints about such frauds, with 50 cases reported just this year. Investigations revealed that the modus operandi across these frauds shared similarities, including common names involved in the scams.

Progress in Arrests

In response to these crimes, the police have taken action. Five individuals have been arrested and charged in connection with these frauds, and eight FIRs (First Information Reports) have been filed.

The Pursuit of Kingpins

The authorities are committed to capturing the masterminds behind these cryptocurrency scams in Himachal Pradesh. They have begun mapping their assets and conducting financial investigations to bring them to justice.

Warning to the Public

Director General of Police Sanjay Kundu issued a stern warning to the public, advising them not to fall victim to cryptocurrency fraudsters. The need for caution cannot be emphasized enough, given the growing prevalence of such scams.

The cryptocurrency fraud scheme in Shimla has caused substantial financial losses to many unsuspecting individuals. The criminals employed a range of deceptive tactics, including Ponzi schemes, fake websites, and price manipulation. While progress has been made in arrests and investigations, the hunt for the kingpins continues. It is crucial for the public to remain vigilant and avoid falling prey to such cryptocurrency scams.

Please, also have a look into : Biggest drug haul in 2 decades: NCB cracks pan-India drug network that used dark net, cryptocurrency