Over 1,000 Himachal cops fell victim to cryptocurrency fraud, some quit jobs to promote it

A majority of the police personnel who invested in the fake cryptocurrency were duped of crores of rupees, but some of them made huge gains, became promoters of the scheme, and roped in more investors for it, an SIT probe said.

Shimla: Over a thousand police personnel fell victim to a fake local cryptocurrency created by fraudsters in Himachal's Mandi district, an official said on Thursday.

A majority of the police personnel who invested in the fake cryptocurrency were duped of crores of rupees, but some of them made huge gains, became promoters of the scheme, and roped in more investors for it, according to investigators of the Special Investigation Team (SIT) constituted to probe the scam.

According to police, at least one lakh people have been duped by the fraudsters in the cryptocurrency fraud, and 2.5 lakh IDs have been found – which included multiple IDs of the same person.

To get investors, the scammers launched two cryptocurrencies – 'Korvio Coin' (or KRO) and ‘DGT Coin’ – and created fake websites with manipulated prices of these digital currencies.

They lured the initial investors by promising them high returns in a short span of time. They also created a network of investors, who further expanded the chain within their own circles.

Policemen, teachers and others got involved in the scheme for quick returns.

Although a majority of the police personnel involved suffered losses, their promotion of the scheme created trust among the investors and gave credibility to the investment plan.

Some policemen involved in the cryptocurrency scheme opted for voluntary retirement scheme (VRS), and became its promoters, a police official told PTI on Thursday on the condition of anonymity.

“We will get all the wrongdoers… The investigation is progressing in an organised and planned manner,” DGP Sanjay Kundu said. He added that all those involved in the scam will be dealt with strongly as per law.

Cryptocurrency is a digital currency designed to work as a medium of exchange through a blockchain-based computer network that is not dependent on any central authority, such as the government or bank to uphold or maintain it.

The scam started in 2018, with a majority of victims from Mandi, Hamirpur and Kangra districts. In certain cases, a single person roped in up to 1,000 people.

The accused used a combination of misinformation, deception and threats to maintain control over their scheme and continue extracting money from unsuspecting investors by manipulating the cryptocurrency prices which led to huge financial losses to the victims, the police had earlier said.

The cryptocurrency scammers approached people with an investment plan related to a locally made cryptocurrency known as ‘Korvio Coin’ or KRO coins, and charged an initial activation fee for getting their accounts activated. Three to four kinds of cryptocurrency were used.

The scammers built fake websites to list their coins and manipulated their prices. Later, they launched a new coin called 'DGT Coin.' After enough people had purchased these coins at a higher rate, its price was deliberately brought down causing massive financial losses to the investors.

The investigation also revealed that apart from cryptocurrency, other deposit schemes, such as a 10 per cent monthly return on a Rs 90,000 deposit, police said.

Police have cautioned the general public to be careful if any scheme promises over 12 per cent annual returns.

Two main accused Sukhdev and Hemraj, who were earlier in the month arrested from Gujarat, confessed during interrogation that they have outstanding liabilities of Rs 400 crore. The alleged kingpin of the scam, Subash, is still at large.