Indian Police Probe Crypto Exchange and Founders Allegedly Running a Scam

Delhi police are reportedly investigating a cryptocurrency exchange and its executives allegedly duping Indian investors after receiving multiple complaints. The complainants further say the company has moved office overseas without returning their investments.

Police Investigate Crypto Scam After Multiple Complaints

Forty-three people have filed complaints with the Delhi Police regarding a cryptocurrency investment scheme based out of Connaught Place, a financial hub in New Delhi, local news outlet Millennium Post reported this week.

The Economic Offences Wing of the Delhi Police subsequently launched an investigation into Pluto Exchange and seven of its executives, whom investors have identified as being behind the scheme.

According to the police, one of the suspects told a complainant, Joginder Kumar, about his crypto trading and mining business operating under the name “f2poolminin,” and a cryptocurrency he and another suspect had launched. He urged Kumar to invest in the cryptocurrency, assuring him that it had a fixed return of about 20% to 30% per month. “[He] told me that if he brought more clients to his company he will give me a commission,” the publication also quoted Kumar as saying.

After investing Rs 5 lakh ($6,780) but never received any payouts he was promised, Kumar took the matter to an official of Pluto Exchange. However, he was told that due to the falling price of bitcoin and the size of his account, the company was unable to pay him through its bank. Kumar was told to wait a few more months. However, after waiting a long time, he was still not paid anything.

Kumar then went to the exchange’s office near Connaught Place and discovered that it has moved from India to Dubai. “I found that [there are] lots of people like me who invested their money in the company. The director collected approximately Rs 50 crore [$6.78 million] in the name of the cryptocurrency business,” Kumar described.

According to the police, 43 people have filed complaints with the Economic Offences Wing police station so far. Preliminary inquiries and evidence submitted by the complainants show that they have invested more than Rs 2 crore in the cryptocurrency scheme operated by Pluto Exchange’s proprietors.

In December 2017, the Dubai-based Pluto Exchange announced that it was launching a crypto trading app in India. While there is a listing for Pluto Exchange on the Google Play Store, several users complained that the app was not working back in 2018 and there has not been a newer review since then. At the time of this writing, the exchange’s website is no longer live.

Pluto Exchange CEO and founder Bharat Verma told The Hindu Businessline in February 2018 that his exchange offered crypto-to-crypto trading for major cryptocurrencies, such as BTC, BCH, LTC, ETH, and DASH, with a plan to provide rupee support linked to bank accounts in the future.

However, India’s central bank, the Reserve Bank of India (RBI), issued a circular that banned banks from providing services to crypto businesses in April 2018. It caused all crypto exchanges in India to suspend INR support and began offering peer-to-peer (P2P) trading services. The RBI banking ban on crypto businesses was quashed by the supreme court in March. Meanwhile, cryptocurrencies, including bitcoin, were never banned in India.