NEARLY a year after the Economic Offences Wing (EOW) of the Mumbai Police booked a Goregaon resident for allegedly duping investors by inviting them to invest in his cryptocurrency marketing scheme, the agency is yet to find investors who had invested in the scheme. In the absence of investors, the case registered under the Maharashtra Protection of Interest of Depositors (MPID) Act has hit a dead end.
According to the police, accused Subhashchand Jewria lured investors by advertising about his “virtual currency”, promising that on completion of the lock-in period of 18 months, the cryptocurrency could be used for online shopping. During investigation, the agency came across a couple of investors who could have invested in ‘ATC Coin Ltd’. However, when the EOW approached them asking for the details of losses they had incurred, none of them came forward.
“Since the case deals with cryptocurrency and in the absence on proper law and regulation, investors are scared that if they come forward, they might face a lot of scrutiny. While we managed to trace a few of investors, they did not lodge any complaint. The case has been stuck since then,” said an officer, who did not wish to be named. “Also, with the case registered under MPID, while the assets of the accused have been frozen, the same cannot be disbursed among investors since none of them has come forward,” added the official.
According to the complaint, Jewria, in March 2017, had incorporated ATC Coin Ltd in the United Kingdom, with a paid up capital of one pound under the garb of selling his cryptocurrency.
The accused floated websites — http://www.atccoinmlm.com, http://www.atccoin.net and http://www.cryptoinbox.com — through which he invited people to invest between Rs 5,000 and Rs 20,000 in the company’s scheme. The accused also claimed that after a lock-in period of 18 months, ATC coins allocated to the investor could be traded on exchanges.
A cryptocurrency is a digital asset used to trade. The virtual currency uses cryptography to secure transactions and control creation of additional units of the currency. Bitcoin became the first decentralised cryptocurrency in 2009.
Since then, numerous cryptocurrencies have been created.In July, the Reserve Bank of India issued a circular banning banks from extending banking solutions to cyrptocurrency entities.
The EOW claims that the accused managed to raise Rs 84 crore, which he diverted to his personal accounts. “We received information on cryptocurrency ATC Coin floated by Jewria. Subsequently, a reference from the RBI forwarding an anonymous complaint with the same allegation was also received. Accordingly, a Preliminary Enquiry (PE) was constituted and after scrutinising the statement of accounts, we found that it was a bogus scheme floated by Jewria in the garb of a cryptocurrency,” said an officer privy to the investigation.
The EOW had booked Jewria and his brother, Chirag, besides ATC Coin Ltd and Jewria Services Club India Pvt Ltd, for cheating (420), criminal breach of trust (409) and criminal conspiracy 120 (B) of the Indian Penal Code (IPC) and sections of the MPID Act. The agency has also frozen 28 accounts and conducted searches at the office and residential addresses of the accused persons.
The EOW probe had revealed that ATC Coin Ltd, a UK-registered company with a registered address in Covent Garden, London, was floated to engage in the business of fund management and also create a cryptocurrency by name ‘ATC Coin’ with Jewria as its sole director”
“When we verified the office address, we found that around 9,000 companies were registered at the said address. However, it did not include the name of ATC Coin Ltd… it is a fictitious company which only exists on paper,” added the official.
“It a classic case of fraud committed by floating a multi-level marketing scheme and luring investors with high returns and enviable rewards like sponsoring a foreign vacation or gifting high-end cars and also the claim that after completion of a lock-in period of 18 months, the cryptocurrency could be used for online shopping,” said an official.