A Crypto mining operation funded by Ponzi scheme has been raided by police in India where one employee was taken in.
This raid occurred after the arrest of the owners of the mine Mr. Vijay Kumar and Kamal Singh on April 25th. Both are accused of amassing more than $14.9 million through an illegal Ponzi scheme promoted by bits2btc.com.
It has now been reported that police found over a hundred Ethereum mining rigs which comprised high powered computer processors, servers, and five hundred graphics cards. Neighbors have also revealed whenever they got curious and inquired what was going on the owners responded by saying it was a computer processing unit that had servers of a large company.
Through interrogation of the two owners, police determined that the Ethereum mining rig was indeed funded by the bits2btc Ponzi scheme. Also, they had expanded their criminal activities by launching two crypto coins; Mcap and HBX, and an additional scam – gainbitcoin.com.
The two had rented the property where the Ethereum mining rig was located since September of last year. They also hired eight employees to look after the mining hardware machines. Police estimate that in three months of operation, the mining had generated about $105,000.
Further interrogations have revealed there is a third party. Local police officers have been sent to arrest S.S Alagh who is believed to be the third co-founder of bits2btc.com. Arresting officers state that there was a rift between the owners that escalated to the point where Mr. Singh and Mr. Alagh kidnapped Mr.Kumar.
It was during the follow up of the complain filled by Mr. Kumar that the officers were able to discover the fraudulent activities which resulted in the arrests.