Indian citizen Syed Fareed and his son, Syed Afaq Ahmed, have reportedly been involved in a fraudulent cryptocurrency investment scheme.
Both Fareed and Ahmed had launched what now appears to be a Ponzi scheme - which was cleverly disguised as a seemingly lucrative digital currency investment opportunity.
Indian authorities found that Ambidant Marketing and investment firm, run by Faheed and Ahmed, was offering fake “halal” crypto investment contracts, while also misusing Islamic scholars to lure Muslim investors.
Indian Authorities Clamp Down On Crypto Firms
Ambidant Marketing’s representatives had told unsuspecting investors that their cryptoasset investment plans were Sharia-compliant, meaning that they were in accordance with Islamic law.
After India’s reserve bank (RBI) declared that digital currencies were not legal tender, the nation’s Enforcement Directorate, a local law enforcement and intelligence agency, began investigating potentially fraudulent crypto-related businesses in the country - including Ambidant Marketing’s “halal” crypto investment contracts.
Notably, Ambidant Marketing had been issuing huge payouts of up to 50 percent (of total investment) to its investors when it first started. However, the payout amounts were lowered as more investors began participating in the scheme.
At first, the returns were cut in half to 25 percent, then to 11 percent, and then the company stopped payouts completely - as its last 9 percent monthly return was in January 2018.
Fake "Halal" Investments
Ambidant Marketing has reportedly not made any additional payments to its investors since January, however, some people who made very large investments have received flats (apartments) as a type of return for their contributions.
As mentioned, both Fareed and Ahmed had involved Muslim scholars in their fraudulent crypto investment scheme - as they were used to make misleading statements that claimed the company was operating a “halal” business.
The Enforcement Directorate issued the following statement regarding Ambidant’s operations:
During the investigation, it came to the fore that the scheme run by the company is surely a potential Ponzi scheme. In view of the above, ED has written to the RBI (Reserve Bank of India) to have another look into the matter and protect the interest of the investors/depositors at large who are being duped in the name of Islamic banking/halal investment.
Income Tax Department Goes After High Net Worth Investors
At the time when cryptoasset prices had reached their all-time highs (in late 2017 and early 2018), and also before the RBI had instructed local banks to stop offering banking services to Indian citizens dealing in cryptos, Ambidant Marketing’s questionable business had been running smoothly.
When Indian authorities began clamping down on digital currency investors and the nation’s income tax department issued notices to high net worth cryptoasset traders, Ambidant Marketing was among one of the main companies targeted by the country’s regulators.
There were over 500,000 tax notices sent to Indian crypto investors and Ambidant received one as well. Presumably, Ambidant's Ponzi scheme may have caught the attention of India's law enforcement agencies at this time.