Noida: 12 arrested for planning digital currency fraud

Police said the suspects, under the guise of launching a digital currency, were planning to engage in multilevel marketing, which is illegal in

The Noida Special Task Force (STF) and Sector 58 police on Friday arrested 12 people who had gathered at a hotel to launch a digital currency. Officials said that although currently there is no law allowing or prohibiting trading in cryptocurrency in India, the suspects, under the guise of launching a digital currency, were planning to engage in multilevel marketing, which is illegal.

Police said most of the arrested persons previously worked in a fictitious real estate company, whose owners duped scores of investors and fled abroad in 2019 (Sourced)

Multilevel marketing, just like any other Ponzi scheme, is the practice of selling goods or services on behalf of a company in a system whereby participants receive commission on their sales as well as the sales of any participants they recruit.

Hemraj Meena, senior superintendent of police, Uttar Pradesh STF, said police received information that some people would be gathering at a hotel in Noida’s Sector 62 to launch a digital currency ‘Coin Cake’. “A joint team of Noida STF and Noida police conducted a raid and arrested 12 people from the hotel. Police recovered 16 mobile phones, two laptops, 30 debit cards, seven Aadhaar cards--four of which were forged-- 116 visiting cards, two wristwatches, six driving licences, one Toyota Fortuner and one Tata Safari and ₹1.52 lakh cash from their possession,” said Meena.

Raj Kumar Mishra, additional superintendent of police, Noida STF, said most of the arrested persons previously worked in a fictitious real estate company, whose owners duped scores of investors and fled abroad in 2019. “A total of 284 cases were registered against this real estate firm. During interrogation, one of the suspects, identified as Ashish Kumar (30) from Muzzafarnagar, said he had done his MBA from UK’s Cambridge University in 2011. He returned to India and started working for that dubious real estate firm as a technical head in 2018,” said Mishra.

Another suspect, identified as Vikram Singh Yadav (35), from Lucknow, was a senior manager in the same company.

Mishra said Kumar and Yadav joined hands to launch a virtual currency to cheat people. “They also roped in some former employees of the same company. On Friday, they called around 80 investors for the launch of the digital currency and sought investment, promising to double their money in a year. They were planning a multilevel marketing scheme, which is illegal,” said Mishra.

A case has been registered against the suspects under sections 420 (cheating), 467 (forgery), 471 (using as genuine a forged document) of the Indian Penal Code and sections 3 and 4 of Chits and Money Circulation Act. The suspects were produced in court and sent to judicial custody.