Criminals are targeting bitcoin traders in an effort to extort cryptocurrency
Divyesh Darji is wanted by police in India for promoting a cryptocurrency called Regal Coin
An Indian businessman who made a fortune from an alleged cryptocurrency scam is on the run from authorities, according to local reports.
Divyesh Darji is wanted by Gujarat police for promoting a cryptocurrency called Regal Coin, reported, which promised customers a 5,000 per cent return on investments.
Mr Darji had previously been involved with Bitconnect, a cryptocurrency firm that gained notoriety in January 2018 after it collapsed in spectacular fashion.
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After being suspected of operating as a Ponzi scheme, Bitconnect was forced to shut down its cryptocurrency exchange and lending operations due to legal pressure from regulators.
It resulted in the Bitconnect Coin cryptocurrency crashing in value to below $1, having previously traded close to $500.
Mr Darji had served as the head of Bitconnect’s India operations, and was accused of netting millions of dollars from investors.
Indian police said Regal Coin offered similarly false promises to investors, with huge payouts to people able to recruit more users.
The cryptocurrency suffered a similar fate to Bitconnect, experiencing a price surge to nearly $90 in late 2017 before crashing.
Regal Coin is currently worth less than $0.01 according to the CoinMarketCap cryptocurrency price index.
Alleged victims have reported to police losing a combined INR 45 million ($650,000) through their investments in Regal Coin.
Mr Darji was released on bail last month after being charged with violating the Gujarat Protection of Investors Deposit Act and The Prize Chit Money Circulation Scheme Banning Act, according to the report.
The Criminal Investigation Department (CID) in Gujarat told the paper that he is currently on the run.