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Cryptocurrency fraud: In a series of “rug-pulls,” investors in Himachal Pradesh lose 200 Crore

Independent member Hoshyar Singh brought up the issue in the Vidhan Sabha (state legislature), estimating that more than $24 million (Rs 200 crore) had been stolen in Kangra and Hamirpur alone.

Over the course of five years, starting in 2018, fraudsters in the north Indian state of Himachal Pradesh are accused of defrauding several cryptocurrency investors of more than $24 million (about Rs 200 crore). The increase in investor interest in cryptocurrencies over this time period is notable.

The suspects, who are believed to be members of a criminal organization, encouraged investments in KRO and DGT coins while promising investors huge profits quickly. They used a Ponzi-style scheme, persuading early investors to recruit more investors to engage other investors to recruit more investors.

Independent lawmaker Hoshyar Singh brought up the issue in the state legislature, or Vidhan Sabha, and estimated that more than $24 million (Rs 200 crore) had been stolen in Kangra and Hamirpur alone, according to PTI.

The SIT’s leader, Deputy Inspector General of Police for the Northern Range Abhishek Dhullar, stated on Monday (Oct. 2) that the exact amount of the fraud is still unknown.

Five people have been detained so far in connection with the fraud, but the scheme’s organizer is still at large, according to police.

In order to keep control over their plan and continue extorting money from unwary investors by manipulating the prices of their coins, the fraudsters combined misinformation, deception, and threats, according to Dhullar.

The “Korver Coin,” often referred to as KRO coins, was the first currency they issued.

They promised the buyers substantial profits in exchange for a one-time activation cost. Over a five-year period, the con artists used three to four cryptocurrencies.

Cryptocurrency: What is it?
Cryptocurrency is a sort of digital currency that is supported and maintained by no central authority, such as a bank or government, and that functions as a medium of trade through a blockchain-based computer network.

Mode of operation
A particular type of financial fraud called a “Ponzi scheme” involves paying out rewards to prior investors using the funds that new investors have contributed rather than genuine profits.

In Himachal, the scammers urged their victims to keep bringing in new members, which led to a circle in which the proceeds from fresh investments were used to pay returns to previous investors, who in turn had received significant profits and had become the scheme’s brand advocates.

The con artists also made fake websites in order to list their coins and control their prices.

Research done so far

According to Director General of Police Sanjay Kundu, “We are close to apprehending the kingpins of cryptocurrency scams in Himachal Pradesh. We have mapped their assets and are conducting a financial investigation.”

A number of cryptocurrency-related frauds have been reported in recent years, including the well-known 2021 Squid coin hoax, in which the coin’s inventors are said to have made off with $23 million.