Ever since Bitcoin saw a massive hike in value in the latter half of 2017, cryptocurrency has become the new buzz word. Recently, the cyber cell unit of the Crime Branch arrested two people for allegedly setting up a multi-level marketing racket and selling cryptocurrency after claiming that they were associated with Rosneft, Russia’s premier petroleum company. According to a report by The Indian Express, the accused had launched two cryptocurrencies and made more than 1,000 people invest with the promise of ‘interest rates from 8-17%’. The police claim that they went on to make several crores.
To make this possible, Ashish Malik and Sandeep Kaushik, organised foreign trips to Russia, Thailand and Dubai, where more than 200 investors were taken to five-star hotels and showed presentations on cryptocurrency, revealed DCP (Cyber and FICN) Bhisham Singh. Interestingly, police claim that some Indian celebrities also spoke during these presentations. The team, led by inspector Sandeep Malhotra under the supervision of ACP Sanjeev Tyagi, worked for more than four months on the case.
They got a major tip when police got to know about one of the investors, Vinod Kumar who claimed that the accused had taken Rs 7,50,000 from him by claiming they were a part of ‘Rosneft hedge fund’. Another police complaint was filed by Ravinder Pal, who claimed to have paid 27 Bitcoins to the accused.
“Most of the victims had invested through cash and cheques. The accused initially started the ‘Rosneft hedge fund’ in January 2017 and later changed their name to RHF coin, at an initial offering of Rs 3.50 per coin. After the recent Bitcoin crash, their value plummeted, so they introduced ‘RHF Gold’ as a marketing gimmick four days ago. This had no value,” a senior officer was quoted saying in the report.
The RBI guidelines clearly state that ‘creation, trading and usage of virtual currencies, including Bitcoin, as a medium, is not authorised by the Central Bank or any other monetary authority’.