Authorities in India have arrested two people in connection with a multi-million dollar cryptocurrency Ponzi scheme known as STA Crypto Token. The scam, which involved the promise of high returns on investments in a cryptocurrency that was supposedly backed by solar technologies and blockchain technology, is estimated to have defrauded over 200,000 people out of Rs 1,000 crore (approximately $120 million).
The two people arrested are Gurtej Singh Sidhu, the head of STA Crypto Token, and his associate Nirod Das. Sidhu is said to have evaded arrest for several days by frequently relocating between cities. Jai Narayan Pankaj, Inspector-General of the Economic Offense Wing of the Odisha police, said that law enforcement had been “chasing Sidhu for the past few days.”
Police say that they have discovered transactions amounting to more than Rs 30 crore (approximately $3.6 million) in Das’s bank account. They also say that the scam operated in several districts but did not gain approval to accept customer deposits from the Reserve Bank of India or other authorities.
Investigators believe that STA Crypto Token was in fact a multi-level marketing (MLM) scheme or Ponzi scam that used buzzwords, especially eco-friendly promises, to disguise its fraudulent nature. They say that the scam’s leaders ran an extensive promotional scheme, organizing events such as lunch and dinner parties at expensive hotels that featured guest speakers and musical performances. The project’s website was hosted in Iceland, but the scam nevertheless operated exclusively in India. This crypto scam is not a standalone case in India. In April, officials froze nearly $12 million related to a project called HPZ token. CNBC has identified Morris coin, GainBitcoin, and a Karnataka-based scam as other recent India-based crypto frauds.
The arrest of Sidhu and Das is a significant development in the investigation into the STA Crypto Token Ponzi scheme. However, it is important to note that many victims of the scam are still waiting to be compensated for their losses. It is also important to be aware of the risks associated with investing in cryptocurrencies, especially in projects that promise high returns with little or no risk.
If you are considering investing in cryptocurrency, it is important to do your research and only invest money that you can afford to lose. You should also make sure that the project you are investing in is legitimate and has a good track record.