The accused ran a fake company and lured investors by offering lucrative rates of returns for investing in crypto assets.
In Kannur, Kerala, on Monday, Police arrested 4 persons for defrauding crores of INR from investors, as per an article by The New Indian Express.
The accused are named Muhammed Riyas, C Shafeeq, Wasim Munavar Ali, and Muhammed Shafeeque.
Modus Operandi of the Perpetrators
Police said that they allegedly raised around INR 100 crores from thousands of investors by offering attractive returns of 2% to 5% per day, through investing in crypto assets. They created a fake company called Long Reach Technologies in Bengaluru and a website. Funds were raised through this website.
When some of the investors did not get any return or their principal amount, they approached the police.
The investigation began 4 months ago when Kannur Police received a complaint from Muhammad Dishad, one of the investors.
Police found that around INR 40 crores were deposited into the account of Riyas, INR 32 crores into the bank account of C Shafeeque, and INR 7 crore each into the bank accounts of Wasim Munavar Ali and Muhammad Shafeeq.
The Economic Times (ET) reported that after carrying out all the transactions with the customers, the rest of the funds were transferred to the kingpin’s account.
The kingpin is absconding as revealed by PP Sadanandan, the Assistant Commissioner of Kannur. Kerala Police Crime Branch had recently frozen his bank account holding INR 34 crore. Earlier, he was arrested in a similar case of money laundering in Malappuram district. Afterwards, he secured bail and is reportedly in the Middle East, currently.
As of now, only one complaint has been lodged from the Kannur district, the Police added.
How to Protect Yourself from Fraud?
In the crypto industry, it is said, “not your keys not your coins.”
It means if you don’t hold the private keys of your digital assets or coins, you do not own them. Whoever has the private keys can spend the assets.
Digital assets’ sole purpose is to create a decentralized economy wherein every person would be the owner of his/her assets. It is ensured through cryptography, smart contracts, blockchain, and decentralized wallets.
An investor should always check whether a scheme gives the custodial rights to the service provider or not. If anything seems suspicious, one must not proceed, or if the scheme is availed, the private keys of the digital assets should be kept with the original owner.
Any investment scheme should be verified through proper channels provided by the Government or industry organisations like the Blockchain and Crypto Assets Council (BACC).
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