Indian authorities are engaging in a sweeping crackdown on OneCoin, a digital investment scheme that is commonly seen as a scam.
On Sunday, Indian police in the city of Mumba arrested 18 individuals associated with the fraudulent scheme. According to The Hindu, the 18 individuals were conducting a OneCoin seminar over the weekend. The event, which saw at least 500 participants, was also attended by undercover police who witnessed the entire presentation that promised significant returns on the purchase of a single OneCoin for ₹11,900 (approx. $185).
A report by Times of India reveals that the 18-member group affiliated with OneCoin began operating 8 months ago and had collected nearly $90,000 over the period from 72 investors. “The entire sum was collected in cash, but they did not give receipts to avoid a money trail,” a police official stated.
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Upon interrogation, the individuals pointed to four bank accounts related to the scheme in India’s capital Delhi and Rajasthan, an east-Indian state. Indian authorities proceeded to seize ₹18 crores (approx. $2.8 million) from a single bank account in Delhi. Notably, none of the bank accounts were registered with any connection to OneCoin.
Hemant Nagrale, police commissioner of Navi Mumbai stated:
The minute people put money into their accounts, they would see a coin against their name in the software. The accused told investors the value of the coin would increase in the next three to four years and they could become billionaires.
Victims of the scheme were promised returns on ‘investment’ by December 2018, according to the Indian Express. The police commissioner added that more bank accounts may be seized while investigations continue across the country.
A separate report by the Financial Express points to police booking four other individuals who worked at ‘senior positions’ in the company, with the 18 arrested individuals deemed ‘local agents’ purporting the scheme to attract first-time investors.
While the 18 arrests and the subsequent money seizures have dealt a significant blow to OneCoin operations in the country, authorities are looking for five ‘masterminds’ running the scheme in India, currently at large.
“We have alerted airport authorities so that these five accused do not flee the country,” a police official stated, as reported by The Hindu.
The arrests and seizures make for the most comprehensive crackdown by authorities against OneCoin so far. Financial regulators and authorities in other countries including Belgium and Uganda have previously warned the public of OneCoin. In September 2016, the UK’s financial regulator issued an official warning whilst revealing an ongoing investigation by the City of London Police into the scheme.
In a recent interview with CCN, a blockchain developer who revealed an approach by OneCoin to recruit him as a Chief Technology Officer claimed that OneCoin had no blockchain at all and used an SQL script to generate coins.
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