In Kerala, India, a person has been arrested for involvement in a Cryptocurrency related fraud. Abdul Gafoor, a native of Malappuram, Kerala, India was taken in judicial custody as per the orders of PMLA (Prevention of Money Laundering Act) court in Kozhikode.
Abdul Gafoor is one of the prime accused, the other being Nishad, in the fake crypto coins scam amounting Rs 1,200 crore, says a news report. It came under the notice of agency in January this year.
The Enforcement Directorate of India, the central agency may seek his custody for interrogation on Monday.
The alleged scam took place in 2020, during the Covid lockdown period. The promoters of the scam pushed the investors to buy a non-existent crypto currency “Morris Coin”. It was listed with a Coimbatore-based cryptocurrency exchange called ‘Franc Exchange’.
Although the mastermind behind the whole fraud is identified to be K. Nishad.
He duped almost 900 people and slipped out of the country. Earlier ED has attached his properties valuing 36 crores in Malappuram. Many other fraudsters have already been arrested in the same case.
After the police in Kannur and Malappuram districts registered various cases against Nishad and others under Section 420 (Cheating) of IPC as well as the Prize Chits and Money Circulation Schemes (Banning), the agency picked up this case last year.
According to Enforcement Directorate sources, Gafoor, who is the owner of an inactive firm – Shell company, Stox Global Brokers Private Limited, based in Malappuram, was involved in allegedly siphoning money from people. He enticed them with a fake crypto coin offers in the form of Morris Coins. He sold a set of 10 coins for Rs. 15,000 with a lock in period of 300 days. They were also provided an e-wallet to the customers.
But, the promoters of the coin siphoned the money and invested it illegally in immovable properties in Kerala, Tamil Nadu and Karnataka, particularly in real-estate without showing any source of income.
The invent of ponzi schemes to dupe innocent people seems to be one of the valid reasons for the governments to tighten crypto norms in India. As reported here as per Union Budget 2022 passed in Parliament, all incomes from Crypto assets will be taxed at the rate of 30%. The Government also clarified strenuously that imposing of tax does not make the trading in crypto currencies or crypto assets legal in any manner.
However, the Finance Minister, Ms. Nirmala Sitharaman stated that discussions with various stakeholders are being conducted in order to come out a law to regulate the crypto currencies or digital assets.
People are often attracted to the big returns shown by the sham agencies. Moreover, the cryptocurrency sector has been in talks due to its volatile nature and the kind of value escalation witnessed in Bitcoin.
In India, the trading of cryptocurrency has not been banned by the Government of India as of now. Nor it has been properly regularized. Hence, people invest at their own risk which also increases the chances of their falling prey to such scams.
Recently, during Parliamentary debates over Cryptocurrency, many members of Parliament demanded a ban on Cryptocurrency due high probability of scams.
