MADURAI: Hundreds of small investors, including daily-wage labourers, housewives, and auto drivers, took to the streets in Madurai and Dindigul districts on Friday after falling victim to a multi-crore cryptocurrency Ponzi scam.
The protests turned violent in Dindigul’s Kasampatti village, where angry victims ransacked the houses of middlemen, demanding the immediate arrest of the fraudsters and the recovery of their money. The victims lodged petitions at different police stations and special camps in southern districts on Friday.
A case has been registered in Madurai district cyber crime police, and 12 people have been arrested, Madurai SP N Devanathan said. Steps are also under way to freeze their passports and recover the duped money, he added.
The kingpin of the scam has been identified as Ranjith, and his family members and neighbours from Melur. Ranjith allegedly claimed he is a US returnee who learnt how to invest abroad and still has connections in the US.
According to police, it was a link-and-app-based scam where an investor got a link from an agent or APK file. The links, which differed for each investor, displayed the individual’s account status. Some victims said they received links as recently as last week.
Thousands believed to have been cheated of crores: Cops
People were told they could invest in cryptocurrency by paying Rs 50,000 under ‘FQL scheme’ or around Rs 1 lakh through the ‘VG scheme’. The payment is not made using the link, but by cash in person to the agent. After payment, scammers allegedly credited the investors’ accounts with US dollars, which the latter could see by opening the link.
Following this, investors were given three online tasks in their links to complete to earn a few additional dollars as commissions. In case an investor wanted to retrieve their money, they had to raise a request, and their agent would pay them in cash. After this, their accounts displayed the balance after the debit.
The individuals were allegedly made to believe that under this copy-trading investment method, they would get twice the money after a certain period. If they continuously invest or invest more, they would be “level-two investors” and receive more interest with higher returns.
Level-two investors also performed extra tasks to earn additional dollars¸ and be eligible for prizes such as bikes, gold jewels, among others, if they convinced more people to invest. “At least for the last two years, the fraudsters have been operating the scam. The reason many fell into the trap was that the initial investors received their commission, interest, and returns,” said the investors.
The investment became popular through word of mouth. Eventually, the scam spread to neighbouring Dindigul, said police. “We have received at least 500 petitions so far, and it is believed that thousands of people have been cheated of crores of money,” added a senior officer.
As the information spread rapidly on social media, investors gathered in front of the house of Ramesh and Vijay, agents, in Kasampatti and ransacked the house on Friday. When police attempted to take Ramesh away for questioning, the protesters allegedly threw stones and footwear at the police vehicle.
The tension calmed down after Dindigul SP R Jayakumar held discussions with the affected investors. Sources said the arrested included A Kallannai, P Kallanai, K Pushpam, A Panchu, R Anandhi, and A Rajalakshmi.
The duped investors can file a complaint through helpline number 1930 and cyber crime reporting portal www.cybercrime.gov.in.
