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Police in Mumbai have busted a gang allegedly involved in a cryptocurrency scam that amassed an estimated 1 billion rupees (nearly $14 million). The gang targeted people by launching a cryptocurrency called Cashcoin and sold it to investors, promising to double their money. 

Also Read: Indian Blockchain Summit Draws Policy Makers to Speed up Crypto Regulation 

An Intention to Cheat

Four people have been arrested in relation to the scam, which saw investors swindled out of nearly $14 million. The Times of India reports that those arrested are Sanjay Sontakke, 44; Rajnikant Kumavat, 46; Alpesh Barodia, 32; and Kirankumar Panchsara, 38. The four suspects allegedly launched Cashcoin a year ago, with the inspector involved in the case, Sunil Jadhav, quoted as saying: “The accused held meetings in Mumbai, Surat and other parts of Gujarat, and lured people into investing their hard-earned money by promising to double it in two months.” He added:

Initially, the gang repaid a few investors to lure more people in and then defaulted. Their intention was to cheat.

The offences drawn up by the police include cheating, breach of trust, criminal conspiracy under the Indian Penal Code and sections of the Information Technology Act. The complaint was initially lodged by a resident of Surat who alleged that 10.2 million rupees ($145,000) were stolen from him. Police are in the process of freezing a number of bank accounts in the country as part of the investigation. The Times reports that the police are still looking for a fifth suspect, Ashok Goyal, who reportedly played a key role in the alleged scam but is on the run.

Hostile Crypto Environment

The scam shows that even in India, where the government has been slow to come up with a crypto regulatory framework and where digital assets have historically been illegal, crypto scams can be successful. The crypto climate in India is hostile – the central and state governments are continuing to crackdown on crypto businesses, while authorities have been constantly warning investors against investing in cryptocurrencies. Banks in India have even stopped servicing crypto exchanges in the country. A scam of this nature and magnitude risks leaving the public even warier of cryptocurrencies.Indian Police Arrest 'Cashcoin' Gang Accused of Scamming Millions From Investors

There is evidence, however, that cryptocurrency adoption is moving in the right direction in India. Its crypto community has been campaigning on social media for “positive regulations” and the rollback of the banking ban, and the country’s Supreme Court is due to hear the petitions against the cryptocurrency ban by the country’s central bank. These moves will hopefully ease the world’s seventh largest economy closer to accepting cryptocurrencies, for the benefit of its 1.34 billion people.

What do you think about the Cashcoin crypto scam and others of this nature?  Let us know in the comments section below.

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