Cryptocurrency Scam: Economic Offences Wing exposes Rs 1,000 crore fraud spanning across India

The Economic Offences Wing (EOW) of the state crime branch has brought to light an extensive cryptocurrency scam spanning across India, which implicated more than 2 lakh individuals and involved deposits exceeding Rs 1,000 crore. The scam, masterminded by a company named STA Token (Solar Techno Alliance), unfolded as a pyramid-structured Ponzi scheme that cunningly eluded detection from the Reserve Bank of India (RBI).

Although there were no formal complaints from the affected investors, EOW conducted a thorough investigation and exposed the illegal operations of the STA Token. The company surreptitiously engaged in unlawful multi-level marketing and money circulation under the guise of cryptocurrency investments, circumventing the mandatory authorization from the Reserve Bank of India. EOW's Inspector General J N Pankaj disclosed: “Our investigation revealed that STA Token was organizing a complex network of financial deception. The company illegally solicited deposits without the required approval of the Reserve Bank of India.”

#WATCH | Bhubaneswar: On a Rs 1,000 crore cryptocurrency scam, (IG EOW) JN Pankaj says, "Odisha (EOW) has busted a very big multimedia, pyramid structure, ponzi scam...We have got to know that people have invested more than Rs 1,000 crores in this scam across India. Around 10,000… pic.twitter.com/K0UZACouCg

— ANI (@ANI) August 8, 2023

Focusing on EOW's scrutiny, STA Token's country chief, Gurtej Singh Sidhu, and Odisha head, Nirod Das, have been arrested and detained. Sidhu, a resident of Faridkot in Punjab, was arrested in Sri Ganganagar, Rajasthan, while Das was arrested in Bhadrak. Sidhu appeared before a court in Sri Ganganagar, which granted him seven days' transit remand.

The fraudulent company has reportedly amassed Rs 30 crore from around 10,000 people in districts including Bhadrak, Keonjhar, Balasore, Mayurbhanj, and Bhubaneswar. Moreover, an astonishing sum of Rs 1000 crore has been extracted from around 2 lakhs of investors hailing from Bihar, Uttar Pradesh, Punjab, Rajasthan, Haryana, Delhi, Jharkhand, Assam and Madhya Pradesh.

Pankaj elucidated, “Our action stemmed from intelligence advice on Bhadrak’s cryptocurrency scheme. The modus operandi employed by Das entailed enticing local residents to invest in cryptocurrencies while urging them to recruit additional investors beneath them. The company offered attractive incentives to those who could expand this network of investors, with rewards being determined by the size of the volume of recruits.

The main revelation from EOW was that the STA Token website was hosted in Iceland, but that its illicit financial operations spanned across India. The company has cleverly presented itself as an entity engaged in information technology support services and the export of solar energy technologies. The guise extended to promoting blockchain technology and cryptocurrency exchanges.

Pankaj further exposed, "Our investigation uncovered that more than Rs 15 crore were transferred to two Das accounts between January and July this year. Both accounts exhibited unusually high cash deposits."

EOW's determined efforts have unveiled a complex web of fraudulent activities orchestrated by STA Token, underlining the urgent need for increased vigilance within the cryptocurrency landscape. The nationwide Ponzi scheme is a stark reminder of the dangers lurking in the unregulated world of digital investing, highlighting the urgent need for strong regulatory frameworks to protect unsuspecting investors from falling for such scams.

As authorities continue to investigate the far-reaching repercussions of STA Token's malevolent actions, the case stands as a cautionary tale, urging individuals to exercise diligence and prudence as they navigate the enticing yet treacherous realm of cryptocurrency investments.

Also Read: Lok Sabha passes Digital Personal Data Protection Bill, 2023