First cryptocurrency fraud busted, kingpin arrested in Bengaluru

Complainant was lured with offer to get a return of 180 times the invested amount in 2 years.

Published: 28th July 2016 05:21 AM  |   Last Updated: 28th July 2016 05:21 AM   |  A+A-

HYDERABAD: In one of the first reported cases of cyber crime, involving cryptocurrency in Hyderabad, the complainant was lured to invest Rs 18 lakh on, which claimed to return 180 times the invested amount in two years.

The company’s operations head, BM Jagadeesha, was arrested in Bengaluru by the Cyderabad cyber crime team on July 16 and is now on remand.

First.jpg“Though cases have been registered on the basis of cheating, forgery, fraud, impersonation, breach of trust, this is the first case of its kind registered with Cyberabad police regarding cryptocurrency,” said Md Riyazuddin, inspector of police (cyber crimes), Cyberabad.

The agents of the cryptocurrency company claimed to offer “180 times returns in two years” by the investors through virtual mining website. The victim, a software engineer from the city, invested Rs  18 lakh in January and approached the police on July 11 when the company failed to pay him the promised monthly returns.

Jagadeesha had floated the firm, which was registered in Germany, in the name of two fictitious persons and Nagarajan, who expired last year.

Police investigation revealed that the accused claimed his ‘management team’ to be based in Germany, England and Wales. He had opened five bank accounts. The company had  accounts with ICICI Bank and Axis Bank in the name of a dead person.

“People should not get tempted if they are offered enormous amount of profit because there is no such company which can earn 180 times profit in two years,” warned the police inspector.

Police said there are some other websites like wowcoin, onecoin, richcoin, litcoin that operate and function on the same lines.

“These websites claim to be similar to Bitcoin which has become successful to some extent,” said Riyazuddin. These fraud companies take advantage of Bitcoin’s success and try to lure investors, he added.

A police press note states that Jagadeesha amassed Rs  2,89,12,500 and most of the amount was distributed as commission to agents.


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