Indian Crypto Ponzi Scheme Dupes Muslims With Halal Investment Promises
An Indian cryptocurrency Ponzi scheme posing as an investment company deceiving Muslim investors has been crumbled in the relation of the Bank of India’s declaration of cryptocurrency as “illegal tender”.
The Bangalore, India-based company Ambidant Marketing registered in India run by a father-son duo Syed Afaq Ahmed and Syed Fareed allegedly lured Muslim investors with “halal” investment.
The company had apparently assured investors that its business practices were halal (compliant with Sharia law) and that individuals would receive large returns – upwards of 50 percent – every month if they invested, and promised them of the monthly returns of about 9,000 to 11,000.
Without informing investors, the company would then invest the takings in cryptocurrencies where it made a fortune, enabling it to pay the promised returns for a while until the scheme grew bigger. The company also allegedly used Ulemas to market its activities as Halal.
Its crypto investment positions and exposure were never revealed to investors through this time. Afterward, the company made flat payments only to its biggest investors. The report noted, though, that most Ambidant investors have not received even one-fourth of what they invested.
As more investors joined the Ponzi scheme, payout sizes declined first to 25 percent, and then to 11 percent before finally paying out 9 percent in January 2018, which was its last payout.
Before it stopped paying out, some investors had earned up to double their initial investment amounts, which ranged from Rs 50,000 (about $685) to over Rs 1 crore (roughly $137,165).
Post the RBI’s announcement of bitcoin as ‘illegal tender’, India’s Enforcement Directorate that supervises financial law enforcement started issuing notices to the firms who were involved in currency exchange. It is believed that investment company was one of among 4,000 firms who had been served with a notice.
Speaking about its case findings in a statement released earlier, India’s Enforcement Directorate said:
“During the investigation, it came to the fore that the scheme run by the company is surely a potential Ponzi scheme. In view of the above, ED has written to the RBI (Reserve Bank of India) to have another look into the matter and protect the interest of the investors/depositors at large who are being duped in the name of Islamic banking/halal investment.”
In addition to deceiving investors and running a Ponzi scheme, the activities of Ambidant may well have been at odds with Sharia law itself.
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