The CBI has registered a case against 7 accused in connection with a digital currency Ponzi scheme promising high returns on cryptocurrency transactions worth more than Rs 350 crore. Searches were conducted at 10 locations in 7 states/union territories. During this, several incriminating digital evidence and devices were recovered, including cash worth Rs 34 lakh, digital virtual assets worth US $ 38, 414 in cryptocurrency wallets.

Case registered under these sections

The Central Bureau of Investigation has registered a case under Section 420 read with 120 B of the Indian Penal Code (IPC) and Section 66 D of the Information Technology Act, 2000 against seven accused persons (who were operating different organised cyber crime modules) based in the cities of Delhi, Hazaribagh, Bathinda, Ratlam, Valsad, Pudukkottai, Chittorgarh. 

False and misleading information given to investors

It is alleged that the accused persons acting in criminal conspiracy are actively running various Ponzi and fraudulent schemes promising high returns based on cryptocurrency investments. They are also accused of promoting, promising and disseminating false and misleading information to lure investors into these unregulated deposit schemes which operate without the requisite approval from regulatory authorities like Reserve Bank of India (RBI).

CBI raids were conducted at these places

In connection with the investigation, the CBI conducted searches at 10 locations in seven States/Union Territories including Delhi, Jharkhand, Punjab, Madhya Pradesh, Gujarat, Tamil Nadu and Rajasthan. The searches led to the recovery of cash worth Rs 34.2 lakh and crucial digital evidence including seven mobile phones, one laptop, one tablet, three hard disks, 10 pen drives, memory cards, SIM cards, ATM/debit cards and several incriminating documents.

Fraud revealed from bank account transactions

Further, a total of USD 38,414 (approx) worth of digital virtual assets were seized from the cryptocurrency wallets of the accused persons, which were digitally secured for investigation. These Ponzi schemes were being promoted through several social media groups. Analysis of bank account transactions and cryptocurrency wallets revealed that the illegal money obtained from these schemes was being converted into cryptocurrency to hide its source.

 Transactions worth more than Rs 350 crore took place

Investigation revealed that the accused have multiple bank accounts and virtual digital asset (VDA) wallets with cryptocurrency exchanges such as CoinDCX, WazirX, Zebpay and BitBns. Transactions worth more than Rs 350 crore took place in these accounts and wallets over a period of two years. The victims were allegedly duped on various pretexts such as online loans, online lucky order, UPI fraud and internet banking scams. Investigation is ongoing in this case.