In the recent series of arrests, India’s leading investigation agency, The Criminal Investigation Department (CID) of the state of Gujarat detained Dhiraj Patel, Vijay Prajapati, Ashiq Shaikh, and Kamruddin Syed, in accusation of scamming people through KBC Coin as reported by The Times of India.
The Ponzi Scheme
According to the report, KBC coin is reportedly part of a Ponzi scheme. The cryptocurrency came into the market 6 months ago and its market value has been stagnant ever since the launch. The developers of the coin lured in investors with the digital currency priced at a mere 10 paisa per piece promising them a return of 10 rupees, a guaranteed 100% return on their initial purchase.
The mastermind behind the scam, Baljeetsingh Lashkariya, promoted the cryptocurrency as part of a pyramid scheme. The digital coin guaranteed results of the initial investor getting a major share of incentive from the final series of investors. The promise helped KBC coin attract a whole lot of investors leading to their immense growth in a span of a short period of time. Aiding to the task was Mohan Patel who along with Lashkariya helped increase the user base. Both Mohan and Lashkariya are currently on the run.
Crypto Scene in India
The government of India has adopted a pretty hostile stance towards digital currency. Recently, a proposal suggesting up to 10 years in prison for holding or trading cryptocurrencies was in the news and caused quite a flutter in the crypto community. The country also recently saw Coinome suspending its services from 15 May. Following the country’s hostile approach to cryptocurrency, the crypto exchange company announced the suspension of its services via a tweet on 9 May. Digital currency in India has yet to find its prevalence since the RBI issued a total ban on banks offering financial services to digital startups and enterprises.