A resident of Mangalore, Karnataka, has been arrested for defrauding over 50 people in a cryptocurrency Ponzi scheme. Law enforcement in Hyderabad apprehended Kunjathbail Mujib Sayyad for operating the “Max Crypto trading” Ponzi.

The investigation began in late 2022 when victims alleged that Sayyad and his accomplices promised lucrative returns on investments. The scam operated via an Android application called the MAX App, which promised returns within 150 days of investment.

Users were also offered a two percent commission for every new investor they brought in, with higher commissions for larger numbers. The scheme’s operators claimed connections with big cryptocurrency traders and misled investors by stating they were headquartered in Ajman, United Arab Emirates.

The group held local events to promote their scheme, although it operated entirely online without physical offices in India. According to victims, the scheme initially paid out returns in U.S. dollars, a common tactic to gain credibility. However, the company and its app disappeared within the first 50 days of launch.

In total, the scheme accumulated INR 1.66 crore, approximately $200,000, from 52 victims.

The case was registered by local police after multiple complaints and was later directed to the Economic Offences Wing of the Cyberabad police. Sayyad faces charges under Section 420 of the Indian Penal Code for cheating and dishonestly inducing the delivery of property. He is also charged under Section 406 for criminal breach of trust and Section 120B for being part of a criminal conspiracy. His accomplices remain at large.

Scams like these are common in developing nations like India, where scammers leverage the general populace’s lack of understanding and the hype around cryptocurrencies. Earlier this month, India’s Enforcement Directorate (ED) froze $180 million worth of assets from an investment group alleged to be a similar Ponzi scheme. Prior to that, the watchdog filed charges against 299 entities for operating a fraudulent cryptocurrency mining investment firm.

For the latest news and updates on cryptocurrency, investing, and finance, continue exploring Global Crypto News.

Post Views: 5