Why is India Witnessing An Epidemic of Cryptocurrency Ponzi Schemes?

The question of Whether Cryptocurrencies Will Be Legalised In India, is one that still has not been answered with clarity.

While India still considers cryptocurrencies as illegal and refuse to pass any regulatory framework regarding virtual currencies, it has largely been speculated that Banning Cryptocurrencies In India Is Going To Be Incredibly Difficult.

One has to consider that India is home to 10 large crypto exchanges and has an estimated user base of about 5 to 6 million. Amidst such conditions, another negative trend that has emerged is of cryptocurrency ponzi schemes.

Very recently another ponzi scheme bust in Pune made headlines. The department of cyber crime of the police in Pune city, busted a Ponzi scheme which was related to cryptocurrency.

This bust is a new development in the ongoing case against the ponzi scheme kingpin in India, Amit Bharadwaj. The mastermind behind the GainBitcoin scheme, Amit was arrested this year, along with his three partners, Vivek Bharadwaj, Hemant Bhope and Pankaj Adlakha.

The court has also announced a Hearing Date for the 4 Charged With Being Part Of A Bitcoin Ponzi Scheme. Nearly 8,000 investors fell victim to this elaborate fraud and even though Amit Bhardwaj, Offered To Compensate Victims, the investors still haven’t received their money back.

This is not the first time that such an elaborate scheme has duped Indian investors out of their money in return for a promise of Bitcoins. Back in June, a similar scheme was busted in Thane, Mumbai,

Now the question we are asking ourselves, is that why is India witnessing such a boom in crypto related frauds. Well, we have a few theories in mind.

To begin with, cryptocurrency is an exciting new asset that promises astronomical gains and is thus a very tempting investment for many people. Indians are looking to make quick money and get in on the cryptocurrency action, which is why they are eager to invest in the market.

However, most do not have the know how to actually enter the market on their own. So when third parties such as ‘GainBitcoin’ approach them and offer to procure the bitcoins for them, in exchange of their fiat, they are eager and quick to trust them.

Thereby, gullible investors are falling to prey to such elaborate frauds, primarily because they are not well informed or aware about how the entire process of acquiring bitcoins takes place. They are lured in with the promise of massive gains, and greed ultimately leads to impulsive decisions.

Better regulation and more awareness amongst the common people can actually prevent such scams. The government is however not too keen on making cryptocurrencies legal as of now. So the question we are all asking is, Will India Finally Release a Regulatory Framework for Crypto Industry?