Several mining equipment have been seized by Indian police in a raid carried out in Dehadrun, Delhi. The operation on the 4000 sq feet facility concerns an alleged fraud case. It is alleged that the owners of the mining rigs are involved in a Ponzi scheme which ran on the now-defunct bits2btc.com involving over 1 billion Indian rupees.
The seized items include processors, servers and graphic cards according to local media reports. The facility contained 100 rigs mining Ethereum. About 500 graphics cards and servers were also seized in the operation.
The owners Kamal Singh and Vijay Kumar who is also an engineer were arrested. A third person SS Alagh who ran the mining operations is said to be on the run.
Own Digital Currency
The owners even had their own digital currency and operated another site. The sites are now down. An online petition had been launched against bits2btc prior to the arrests.
Proceeds from the Ponzi scheme were allegedly invested in acquiring the mining equipment according to the police.
The two will be formally charged in about a month’s time according to the police.
This will not be the first case of cryptocurrency fraud involving huge sums of money. Only last month, a bitcoin entrepreneur name Amit Bharadwaj was arrested for duping thousands of people of over $300,000 worth of Indian rupees.
The police have said the arrests are not related.
“This case is separate from Amit Bhardwaj’s. We had already arrested the owners of the mining firm Kamal Singh and Vijay Kumar, 13 days ago. And, based on the further intel, we have now raided their mining firm in Dehradun,” an official handling the case told inc42.
The Indian central bank recently banned regulated financial institutions from having any dealings with cryptocurrency entities. The regulator has been asked by the court to respond to a case filed by a cryptocurrency exchange challenging the ban.