Five Arrested In India In Connection With CoinX Trading Crypto Ponzi Scheme


Police in Hyderabad, India have arrested five men behind a cryptocurrency scam involving a company called CoinX Trading.

CoinX Trading ran a multi-level marketing scheme and had defrauded over 1,200 investors a total of $1.43 million by the time police intervened.

According to Inc24, an Indian news outlet, police in the city of Hyderabad arrested the five in a raid on GRM Estates, a real estate firm based in Secunderabad, India.

Among the five men in custody is Gardesh Ramesh, named as the main suspect and the mastermind of the entire scheme. Ramesh is the founder of CoinX Trading, the company that fronted the cryptocurrency MLM scheme.

The four accomplices arrested alongside Gardesh are Chandupatla Srinivas, Sudagoni Sathaiah, Kunchala Hari Gopal, and Namalla Venkatesh.

During the raid, police seized several things including ATMs, Mobile phones, cars and cash among other items estimated to be worth $260k. Police also confiscated four land sale deeds alleged to be from proceeds of the Ponzi scheme.

The police have indicated that the brainchild of the Ponzi scheme Gardesh Ramesh wanted easy money, and so hatched the illegal MLM business hidden behind CoinX Trading.

The company offered several schemes involving cryptocurrency and Bitcoin. He lured the unsuspecting public, promising high returns that would make them rich very quickly.

Gardesh made the investors believe that CoinX was a legit business giving it a global look by claiming that he had registered it in the U.K and U.S. He, therefore, encouraged investors to put money into the company and wait for huge returns.

CoinX Trading claimed on its website that it launched in 2013.

Gardesh and co. leveraged on the growing popularity of bitcoin and cryptocurrency to get more customers. They were also aware of the general public’s ignorance and therefore paid off early investors to hoodwink them and help lure even more investors.

Authorities estimate that the fraudsters stole about $1.43 million from the public in the one year or so it ran its operations.

Investment plans that lured the public

CoinX Trading offered its investors a total of 12 investment plans. They ranged from a basic plan that required investors to put in an initial $100, to one called ‘elite trader’ that had investors putting in $500,000.

One of its campaigns asked customers to bring in new clients for a chance to earn a 60 percent commission.

The number of days that investors had to wait until they earned returns on their investment ranged from as many as 500 days for the basic plan to 134 days for the elite traders.

It also offered varying daily commission rates, including some bonuses and a percentage in the overall returns for the so-called super investors.

Police have said that investigations are ongoing and more could be uncovered in the coming days.

Crypto scams in India

India has seen a fair share of crypto-related scams in recent years. This is despite the country’s recent ban that prohibited trading in cryptocurrency.

Some of the high profile fraudulent schemes in the country include the $3 – $12.7 Billion extortion case that involved the use of Bitcoin.

Others include the $300 Million Bitcoin scam that implicated one Amit Bhardwaj, and a $15 million scam involving crypto mining.

Another Bitcoin scam involving $763 million has attracted heated debate between the opposition and the ruling party BJP, with accusations of a cover-up surfacing.

As more cases surface, recent revelations might just be a tip of the iceberg.

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