Police Investigation into Coin ZX Fraud

Police in Mumbai have booked the managing director of Coin ZX, an Indian cryptocurrency trading platform, for allegedly scamming investors out of $23 million (Rs 200 crore).

Filed last week, the Kasturba Marg police have opened a case against Ravi Mahaseth, now based in Dubai, along with five others involved in the fraud.

Complaints about Coin ZX first emerged in January 2023, as reported by Hindustan Times. A 25-year-old man, Mohammad Arif, claimed he invested over $5,000 after attending a multi-level marketing seminar. He alleged that Coin ZX representatives promised to invest his funds in Bitcoin and assured him of withdrawals after six months.

Mumbai Police confirmed that Coin ZX defrauded numerous investors across India, with authorities in Hyderabad filing a case against Mahaseth and Coin ZX recently.

One victim recounted being introduced to Coin ZX by Mahaseth’s associate, Ramesh Puri, and investing around $1,300, initially receiving returns for four months. This individual also persuaded friends and family to invest large sums, ranging from $1,150 to $13,800 (Rs 1 lakh to Rs 12 lakh).

Payments halted after four months, with Coin ZX attributing the issue to technical difficulties, promising to resume payments after another four months and complete disbursement within 20 months. However, claims were found false, and Coin ZX ceased operations before many investors realized they were scammed.

In Hyderabad, authorities charged Mahaseth, Puri, and others under Sections 406, 420, and 120-B of the Indian Penal Code for breaches of trust and fund misappropriation.

After the initial complaints, Mahaseth moved to Dubai. His exact location is unknown, though his LinkedIn profile still lists him as residing in Mumbai.

Mahaseth had previously been associated with investment firms such as FX & Smart Bull, Smart X, and Samruddhi Multi Trade Pvt Ltd.

Cryptocurrency fraud is a growing issue in India, which ranked fifth in 2023 regarding complaints related to crypto fraud (840) and sixth in total losses ($44 million).

Recently, India’s Enforcement Directorate raided premises linked to Chirag Tomar, sentenced in the US for using spoofed Coinbase websites to steal over $20 million. Last week, authorities seized $190 million in cryptocurrency stolen from the notorious BitConnect Ponzi scheme.

Edited by Stacy Elliott.