Cryptocurrency scams are a big challenge for the crypto industry and have been detrimental to the progress of cryptocurrencies into the mainstream.
The man who ran one of the biggest cryptocurrency scams ever has been arrested in New Delhi, India. Dhaval Mavani, a web developer who was part of the scam, was deported from Abu Dhabi after a warrant of arrest was issued for him in August last year. Upon landing in New Delhi after his deportation, Mavani was arrested by Indian authorities.
In 2017, Mavani was supposedly hired by the head of Bitconnect to build a website. The Bitconnect scam would go on to defraud investors of at least $3.2 billion in a cryptocurrency scam. Mavani has been arrested because authorities believe he is in possession of comprehensive knowledge about Bitconnect and that he played a part in the promotion of the scam.
Indian authorities received various complaints about the scam in July of 2018 and it is believed that Mavani fled the country after these allegations began to surface. The web developer is also a witness in a case involving the alleged kidnapping of two businessmen in Gujarat State. 11,000 Litecoins, 2,256 Bitcoins and cash were extorted from the victims.
Serial Crypto Scammers
The man who hired Mavani, Divyesh Darji, has been implicated in another cryptocurrency scam and he has once again fled from the authorities. Darji had been released from custody on bail before the second crypto scam was brought to light. The second scam was executed using a company named Regal Coin and it was similar to the scam Bitconnect was running.
There are two other names that have been mentioned in relation to the Bitconnect scam as co-conspirators. Satish Kumbhani and Suresh Gorasiya have been named as part of the scam. Kumbhani was arrested in June while Gorasiya’s whereabouts are unknown. Kumbhani is implicated in other separate fraud and scam cases in ten countries. One of the countries is the United States where he has already been questioned by the FBI due to his part in promoting Bitconnect in the country.
The FBI is looking for victims of the Bitconnect scam as it seeks to make a strong case against the accused. According to the FBI, their bid to find victims is not restricted to the United States only but victims from all over the world are free to contact them with information that will assist with the case.
Investors Should Be Careful
Scammers and fraudsters take advantage of the interest people have in cryptocurrencies and seek to defraud them. This interest, coupled with limited education about digital assets, leaves would be investors vulnerable to such scams.
If you want to engage in cryptocurrency trading, you have to exercise due diligence and ensure that the platform with which you are engaging in business with is legitimate. Extensive research is key to avoid falling victim to crypto scams.