Two Weeks after the Cyber Cell unit of the Crime Branch arrested two persons for allegedly setting up a cryptocurrency racket and duping people of “several crores”, police said another similar racket has surfaced.
According to police, the accused, Kamal Vishnoi, set up a bitcoin trading platform and lured several thousand investors into buying bitcoins offered by him. Police said a former investor filed a complaint against Vishnoi, who was arrested Tuesday. The Economic Offences Wing (EOW) has registered a case under IPC sections 420, 406 and 20-(B) and has also charged the accused under the IT Act, 2000.
Police sources said Vishnoi started his own cryptocurrency in violation of RBI guidelines and organised seminars to lure investors before absconding with their money. As per the complainant, Nitin Gupta, a financier, the bitcoin trading platform was started in 2016. Speaking to The Sunday Express, Gupta said the accused had offered him a chance to invest in bitcoins at a daily interest rate of 5%.
“I met Vishnoi last year. He was offering several plans at 4-5% interest rate on a daily basis. He also offered me a referral plan, wherein I would get a commission rate for the number of people referred. I asked my close friends to invest,” he claimed.
Police said investors who subscribed to the site, http://www.bittradingz(dot)com, had to then transfer the bitcoins to their personal e-wallets. They were promised daily returns on their e-wallets. Gupta told police he invested in 103 bitcoins, to the tune of Rs 1.7 crore that he paid in cash and cheques. Police said these transactions, required as evidence in court, are difficult to trace as they do not have a digital footprint.
Gupta said the accused promised him a return of 200 bitcoins within the next 30 days. However, he alleged the payments were never made.
As per Gupta’s complaint, in March last year, Vishnoi claimed the site was down for maintenance. At a meeting at his house, the accused told investors that he could not pay the 5% interest rate, and promised 2% instead. “The investors agreed, as the interest rate would shoot up massively in 90 days. In the meantime, Vishnoi set up another website, softcoinstradingz.com, and introduced a new cryptocurrency called ‘Soft coin’,” Gupta alleged.
Police said the accused asked investors to invest 25% in ‘Soft coin’. Last year in May, the accused sent a WhatsApp message to Gupta, claiming that the payment gateway will be soon functional and the investors can collect their money. However, police said Vishnoi switched off his phones and fled. “He has been arrested but we want our money back,” Gupta said.