Recently, a scam orchestrated in October 2016 in Vadodara, India gave more insight to what is dubbed as the ‘biggest cryptocurrency scam” in India. The ten complainants who filed their FIRs in Vadodara stated that they were offered 10% return per month on a cryptocurrency fund called “Bitcoin Gain”, they invested around USD 6 million. They received the income only in the first three months till January 2017. Their assets were later frozen including their investment amount.
The accused, Amit Bhardwaj, his brother Ajay Bhardwaj and another Hemant Bhope had lured thousands of customers over the country by organizing seminars and inviting investors. They sold their baseless fraud scheme signing a 18 month contract with the investors. The entire amount of the scam country-wide is estimated to be around USD 287 million. They were arrested while fleeing from Bangkok by the Enforcement Directorate (ED).
According to the local police, the accused modified the contracts they made with the investors, they replaced “Bitcoins” with “cryptocurrency”, also the investors were made to invest in something called ‘Bitcoin Gain’ which was coined to fraud the inexperienced customers.
There have been other ICO related scams like the one where Lakshmi Coin was sold to customers through an Initial Coin Offering (ICO), it was advertised as being backed by the Government and the RBI whereas in reality it had no relation to them.
These scams are being named as Bitcoin or cryptocurrency scams because it was the medium which was advertised to be the USP of the scheme, however, believing in unfeasible guaranteed gain with no proof world-wide should raise doubts in the investor’s mind. They voluntarily fell prey to a dubious scheme.
While investing in cryptocurrency one must only trust a fair deal and also never share the ‘private key’ or the pin to their trusted Bitcoin wallets. Most trusted Bitcoin wallets are open-source wallets that have no regulatory authority who has access to the coins.