Darji and associates allegedly siphoned off about Rs 88,000 crore from gullible investors.
Main accused of Gujrat Bitcoin scam Divyesh Darji was arrested by police from Delhi Airport after his arrival from Dubai on Saturday. He is the Asia head of Ponzi scheme Bitconnect, registered in the UK and being operated from Burj Khalifa tower in Dubai.
Darji and associates allegedly siphoned off about Rs 88,000 crore from gullible investors. This money was routed through his company called Bitconnect.com, launched around the time of demonetisation.
Most of the promoters of this scheme fled abroad after Gujarat CID started the investigation. Many high-profile names, including politicians, are accused in this scam along with Mahendra Chaudhari, Satish Kumbhani and Divyesh Darji. Divyesh Darji is one of the kingpins of the fraud.
These accused launched various websites as platforms, including www.zewanghelp.com, to promote their virtual ponzi scheme.
These fraudsters were using virtual currencies to perpetrate their frauds. They used a Multi-Level Marketing (MLM) method that involves from the existing investors to funds contributed by new investors introduced by the existing ones through online platforms. They solicit new investors by fake promising to invest funds to generate high returns in the virtual currency – bitcoin.
In April DNA had reported why Indian crypto players are fleeing India, and why they have started operation centres in Dubai and other countries after the RBI's order for banks and financial institutions to not to deal with digital currencies.
The government has indicated in the last budget that cryptocurrency is not a legal tender in India. "The government does not consider cryptocurrencies as legal tender or coin," Finance Minister Arun Jaitley had said in the Budget speech.
Cryptocurrencies are facing worldwide clampdown since last year because of higher fluctuations in prices. China has banned the exchanges in September 2017, as part of a broader crackdown. Regulators in Hong Kong and Singapore have also warned against ICOs, citing concerns about fraud, money laundering, and terrorist financing. South Korean regulators said they would ban ICOs, without giving details.
No Legal Tender
The Centre has indicated in the last budget that cryptocurrency is not a legal tender in India. “The govt does not consider cryptocurrencies as legal tender or coin,” Finance Minister Arun Jaitley said in Budget speech.
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