India is one of the most accepting countries when it comes to bleeding edge technologies. Indian IT enthusiasts have been in the cryptocurrency scene well before the industry went mainstream. However, many crypto-related scams have targeted the Indian population too. This time around, the Indian authorities have taken charge. Organizers of an ICO called Bitstrades have been arrested by the Indian police for running an elaborate fraud. The interesting fact is that this ICO has also been advertised on CoinMarketCap.
According to a report by Times of India, arrest warrants for five individuals involved with Bitstrades have been issued. The accusation dealt to these people is for running a fraudulent ICO. The scam company’s founder Hardik Zadafiya has been arrested while the other four accomplices are currently on the run.
The actions of the Indian Police were the result of an FIR (First Information Report) filed by a victim of the scam. The local resident claimed to have been duped of $230,000 by the fraudulent ICO. Indian authorities believe that the scheme might have more victims, though no one else has come forward yet.
The FIR states that 190 potential investors were taken to trips to Singapore and Bangkok as a gesture for building trust towards company. This has led the police to believe that there may be more victims who aren’t willing to come forward with their side of the story.
A police officer involved in the case told TOI that the authorities are hoping that other victims will come forward soon and shed more light about the fraudulent ICO and its operations. The discovery of yet another pyramid scheme in the crypto industry has got the community talking about the lack of regulations for ICOs.
Perhaps the most significant blow to the crypto industry in this incident is that Bitstrades was advertised in January 2018 on the home page of CoinMarketCap. The cryptocurrency market tracker is one of the most authentic sources of information in the industry. This incident could cause people’s trust over the tracker to decrease. Moreover, the official Twitter account of CoinMarketCap also followed the scam ICO’s account before the company was exposed.
Bitstrades was an elaborate and well-planned operation which was also able to secure sponsored articles on a number of other popular cryptocurrency news outlets. Some of the most popular crypto blogs to feature the company are NewsBTC, CoinSpeaker, and The Merkle.
ICOs are a great way for new cryptocurrencies to take off. Investors can buy cryptocurrency that is pre-mined instead of setting up expensive mining equipment and mining the currency themselves. However, no matter how authentic an ICO looks, it is imperative for us to perform extensive research to ensure the safety of our hard-earned savings.
It is quite safe to buy Bitcoin today as it is one of the most successful and trusted cryptocurrencies in the Industry but not all crypto projects are as authentic as Bitcoin, Ethereum, or other internationally-traded crypto coins.