A recent report has revealed that four men who were allegedly linked to a scam which saw victims being scammed out of $14.2 million were arrested in the West Indian city of Surat.
The exact amount stolen was however reportedly higher than the stated $14 million and this makes it the sixth time a digital currency-related fraud will be reported in Surat over the last two years.
KBC Coin Scam
The suspects were said to be promoters of KBC Coin, a digital currency that was supposed to be supported by gold. One of the perpetrators who goes by the name Baljeetsingh Lashkariya and is presently nowhere to be found reportedly started the scheme two years in an advertisement for KBC’s network.
KBC Coin has launched six months ago after it had attracted thousands of investors by promising them a token supported by gold. A single KBC was sold at the rate of 10 paise valued at $0.01 as at then, with the promoters stating that the currency would increase in a hundredfold over a short period of time.
Ashish Bhatia, the Director General of Police (DGP) stated that Lashkariya promised investors that they would get profits but never intended to do so, they instead left the initiative.
“The value of KBC coins never increased and within six months, the promoters went underground.”
Furthermore, Lashkariya who seemed to be the leader of the gang did not secure the necessary permission from the Reserve Bank of India (RBI) to sell his currency. He instead depended on a network of promoters across various bank locations to entice investors before scamming them in exchange for valueless tokens.
Just like several other scams related to crypto, the whole operation played out like a pyramid scheme.
A CID official stated that:
“The first investor in the chain get an incentive from the last circle of investors. This offer played a major role in bringing more investors to the company.”