Fraudsters operating in Himachal Pradesh have been accused of orchestrating an elaborate cryptocurrency scam that duped thousands of investors out of over ₹200 crore over the course of five years, starting in 2018, coinciding with the cryptocurrency frenzy.
The individuals alleged to be part of this criminal gang enticed people by promising substantial returns in a short period through investments in KRO and DGT coins. Initial investors were then encouraged to recruit others, adopting a Ponzi-style scheme.
The issue was brought to the attention of the Vidhan Sabha by Independent MLA Hoshyar Singh, who estimated that victims in Kangra and Hamirpur alone had lost over ₹200 crore. In response to Singh’s speech, a special investigation team (SIT) was formed to probe the matter.
The exact amount defrauded has not been determined yet, according to Deputy Inspector General of Police, Northern Range, Abhishek Dhullar, who leads the SIT.
While five individuals have been arrested in connection with the fraud, the mastermind remains at large. The fraudsters employed a combination of misinformation, deception, and threats to manipulate their scheme, extracting money from unsuspecting investors by manipulating coin prices.
The scheme began with the launch of “Korvio Coin” or KRO coins, where buyers were charged an initial activation fee and promised substantial returns. Over five years, the criminals introduced three to four different cryptocurrencies.
Once investors activated their accounts, they were encouraged to recruit more members into the scheme, following a classic Ponzi scheme pattern. New investments were used to pay returns to earlier investors, and the initial investors received significant returns and became advocates of the scheme.
The fraudsters created fake websites to list their coins and manipulated their prices. They later introduced a new coin called “DGT Coin” and manipulated its price, causing a significant rug pull.
The scammers introduced new coins and investment plans under different company names, such as “Hypenext” and “Aglobal,” presenting each as a fresh investment opportunity.
Police have received approximately 50 complaints about such scams this year alone. During their investigation, they identified similar modi operandi and common names across the various frauds.
Currently, five people have been arrested and charged in connection with the scams, with eight FIRs filed. Authorities are pursuing the kingpins and conducting financial investigations to recover assets.
Director General of Police Sanjay Kundu advised the public not to fall prey to cryptocurrency fraudsters. Cryptocurrency markets have witnessed numerous rug pulls in recent years, including the infamous 2021 Squid coin scam, where the coin creators reportedly made off with $23 million.
