Indian Authorities Uncover $120M Crypto Ponzi Scheme

Local authorities in the Indian state of Odisha took down a $120 million crypto Ponzi scheme on Tuesday. Local media revealed that the Economic Offences Wing (EOW) of the state police arrested two central figures behind the fraud that was operating pan-India.

The police nabbed the mastermind behind the scheme, who constantly changed his location. The Ponzi scheme involved STA Crypto Token.

Another Scam Reminds of OneCoin

Reports identified several victims across the Indian states of Odisha, Jharkhand, Rajasthan, etc., who lost money to the scam.

Based on the reports, the victims invested in STA Crypto Token and recruited others that continued the multi-level marketing scheme. They awaited promised bonuses and multiplied returns in exchange. The scam is a gentle reminder of the OneCoin heist, one of the biggest in crypto history. 

The investigation disclosed that STA had influential members who used aggressive promotional tactics to convince people to participate. Across India, the scheme reportedly had a circle of 200,000 people.

EOW’s JN Pankaj told ANI,

“A lot more people are involved from the Bihar, Delhi, Jharkhand, Rajasthan, MP, and Haryana sides… The people were assured that they will get a bonus and their money would be doubled and tripled.”

Reports indicate that the Solar Techno Alliance (STA) token was born in September 2021. It quickly built a social media presence to impersonate a genuine crypto token. It engaged in false advertising by claiming it is a blockchain-based service connecting users with the nearest local farmers.

Recently, STA reportedly hosted an extravagant event in a luxurious hotel in Goa with a large footfall.

Indian Authorities Actively Nabbing Fraudsters

The investigation cited several red flags from the start, as pointed out by reports. The authorities emphasized that no apex body authorized the investment scheme, including the Reserve Bank of India. Local media revealed that STA hosted its website from Iceland but confined its operations to India.

Last year, the GainBitcoin scam came to light in India. The fraud reportedly involved 100,000 victims losing over Rs 1 trillion ($1.25 billion). 

Various states registered several First Information Reports (FIRs) due to the sheer size of the Ponzi scheme.

In response to the fraud, the authorities issued a public advisory, cautioning people not to invest in Ponzi schemes that promise quick wealth.

In a recent Parliamentary session, Minister of State for Finance Pankaj Chaudhary revealed that the Enforcement Directorate (ED) is actively investigating various virtual digital currency fraud instances. 

He noted that the probes had uncovered crimes of over $130 million (Rs 1144 crore) under the Prevention of Money Laundering Act, 2002 (PMLA). In these cases, the domestic police reportedly arrested at least 20 individuals.