Indian Cryptocurrency Scammers Arrested After Authorities Uncover $1.4 Million MLM Scheme

Omar Faridi
  • Five suspects in India have been arrested on charges of alleged involvement in a fraudulent cryptocurrency-related multi-level marketing (MLM) scheme.
  • $1.4 million worth of investments have been made so far by around 1,200 Indian investors who were promised high returns from CoinX Trading's questionable scheme.

The business offices of GRM Estates Pvt Ltd, a company based in the Indian state of Telangana, were recently raided by local authorities. According to Indian news outlet Inc42, police officers arrested Gardesh Ramesh, the founder of CoinX Trading, a fraudulent crypto-related Multi-level marketing (MLM) scheme.

Four other suspects at the Secunderabad, Telangana-based real estate company have also been taken into police custody. During the raid, four sale deeds were seized. These were documents the suspects may have purchased by using their clients’ money, allegedly obtained through a questionable crypto MLM scheme.

Fraudulent Crypto MLM Scheme

Additionally, police officials reportedly seized $260,000 worth of property including two vehicles, nine cellphones, and cash. The police report noted that,

“The main accused Gardas Ramesh hatched a plan to gain illegal [access to] easy money [,which included] starting [an] MLM business in the name of Coinx Trading (Cryptocurrency/Bitcoin) and luring [the] gullible public with a promise of making them rich within a short period with high returns. Gardesh encouraged them to invest money in Coinx Trading which claimed to be registered in the US and the UK.”

Local Police Report

Moreover, the police investigation indicates that as many as 1,200 unsuspecting customers may have been lured into investing in CoinX Trading’s allegedly fraudulent scheme. Notably, these investors invested over $1.4 million (or 100 million Indian Rupees) so far in Gardesh’s questionable “get-rich-quick” scheme.

This recent crypto-related fraud case now joins a growing list of similar scams carried out by criminals in India. As CryptoGlobe reported, the Asian head of BitConnect, Divyesh Darji, was also recently arrested at the New Delhi Airport.

Growing Number Of Cryptocurrency Scams

Darji has not only been accused of promoting BitConnect’s fraudulent Ponzi scheme, but also of allegedly being involved in various other cryptocurrency scams uncovered in the Indian city of Gujrat. Local authorities have estimated the total amount of the scam to be somewhere between $3-$12 billion.

Earlier in July, CryptoGlobe also reported that Indian politician Shaktisinh Gohil had accused India’s ruling political party, the Bharatiya Janata Party (BJP), of being involved in a $763 million bitcoin “black money” scam. Gohil had alleged large sums of black money had been converted from Indian Rupees (INR) to Bitcoin (BTC) at the time India first introduced its new demonetization policy.

Largely due to the increasing number of scams associated with cryptocurrencies in India, the nation’s central bank (RBI) had instructed all local financial institutions in April to stop offering banking services to crypto-related businesses. In July, the RBI also asked India’s Supreme Court to create regulations for cryptos, as it said they encourage “illegal transactions.”