VISAKHAPATNAM: Cybercrime police have arrested four persons for operating a crypto-based MLM (Multi-Level Marketing) business scam in Visakhapatnam. It was run in different names like UMT, UBIT, Ultraverse and MMMC.
Multiple crypto apps such as SafePal, Binance, CoinDCX, and Coinstore, along with numerous user IDs, passwords, and login credentials were seized. The accused misled the public by promoting investments in these schemes, which were structured as Ponzi-style chain systems. The arrested include Nagireddy Sudheer Naidu of MK Gardens, Mangi Soma Raju (41) of Marripalem, Gurala Srikanth of Chinagadili, and Allipalli Venkata Ramesh Babu of Seethammadara. The quartet were remanded to judicial custody.
Under the direction of Visakhapatnam City Police Commissioner Shanka Brata Bagchi, action was initiated against individuals who invested in fraudulent crypto-based online schemes such as UMT (Unity Meta Token), UBIT, Ultraverse, and MMMC. These schemes falsely promised high returns and guaranteed profits to lure innocent investors.
Ponzi scheme operated via referral links
The fraudulent scheme was an MLM-based crypto investment scam. Investors were promised a daily return of 0.4% for 500 consecutive days under the guise of Return on Investment (ROI), with investment amounts ranging from USD 50 to USD 10,000.
The scheme had no real business or product backing it. Instead, returns to earlier investors were paid using funds from new investors, a classic characteristic of a Ponzi scheme, police said.
New investors were brought in through acquaintances or online referral links. The scheme offered commissions for referring others, with a 50-level deep chain structure. Higher commissions were given to those who directly referred others, police added.