One of the main reasons why traditional investors don’t want to step into crypto is its ties to illegal activities. The lack of awareness amongst people and with no proper regulations in place, the crypto industry is having a hard time gaining mainstream acceptance.
The last few years have seen a growth in crypto crime and the industry has experienced multiple instances of scams, hacks, and acts of fraud. Reportedly, $4.3 billion was lost to crypto scams in 2019, with the majority of funds coming from Ponzi schemes.
As the industry continues to mature, scammers continue to adapt and enhance their methods. Anyone with no experience in crypto can easily be duped into handing over money to scammers who draw victims in with the multiple rags to riches stories that make crypto look like an easy way to make money.
In a similar incident, the Indian police are looking for 5 individuals who supposedly operated a major crypto scam for 3 years in the Indian state of Maharashtra. The police have registered a case against these individuals who have supposedly defrauded investors since 2017.
According to a report from local media outlet New Indian Express, the group operated in the district of Palghar situated in Maharashtra. The suspected culprits have been duping investors under the pretense of cryptocurrency investment.
The group promised massive returns to the victims who believed they were investing in crypto assets. The investment was acquired in Cheques and cash. Once the money was received by the scammers, the group slowly went out of contact and were more evasive in their interactions with the victims.
Despite being in operation for 3 years, the scammers only managed to get away with INR 26 lakh (approx. $34,200). While the sum isn’t much when compared to other similar events, the sum is quite substantial in India.
As of now, the suspects are still at large and the case has been registered under sections 420 (cheating) rw 34 of the IPC with the Boisar police station.
Crypto industry at risk?
The news comes at a time when it looks like the regulators in India are having second thoughts about the legality of cryptocurrencies in India. It has just been 3 months that the Supreme Court lifted the ban on cryptocurrencies, and the Indian Ministry of Finance is already proposing a new ban that could completely destroy the emerging crypto industry in India.
As reported by The Daily Chain, the Indian government might be looking to introduce a law to ban cryptocurrencies and the finance ministry has moved a note for consultations with the cabinet and subsequently to the Parliament.
Hence, reports of cryptocurrencies being used as a means to facilitate illegal activities can be damaging to the tech’s already controversial image.