India: $121 Million Crypto Scam Busted by Odisha Police

Lavina Daryanani
Source: LinkedIn

Note: The article has been updated at 6:19 a.m. UTC on Aug. 9.

A pan-India crypto fraud scheme was recently busted by the Economic Offense Wing of the Odisha police. The prime suspect in the case has also been arrested. The multi-media ponzi scheme involved more than ₹1000 crore [$120.69 million] invested by users in the STA token.

The head of STA Token, Gurtej Sigh Sidhu, and the Odisha unit head, Nirod Das, were arrested by the police. Victims from different states of India, including Delhi, Jharkhand, and Rajasthan, were lured into this Ponzi scheme. Revealing further details regarding the scam, EOW Odisha, JN Pankaj, said,

“Approximately 2 lakh people are members of this. The people were told to invest in crypto coins and gather more and more members. The people were assured that they would get a bonus and that their money would be doubled and tripled.”

Observers were quite delighted about the bust and subsequent arrest. Several appreciated the police for their ”great work” in shielding the common man. Others were quick to point out that people usually fall prey to such scams because of greed and a lack of financial education.

People from the community also feel that the STA token scam bust could hinder the path of mainstream crypto adoption in India. Commenting on the same, prominent Crypto Educator Neel Kukreti told Watcher Guru,

“People will become more skeptic about the legitimacy of any crypto. Education here becomes the key factor.”

Also Read: India Becomes Top Crypto Employer in Asia: China, Singapore Trail

Red Flags

The main culprit behind the crypto scam was found swapping his location to places like Goa, Lonavala, Mumbai, Delhi, Faridkot, Bhatinda, Hanumangadh, and Sri Ganganagar. The movement, however, was constantly tracked by DSP Sasmita Sahoo.

Solar Techno Alliance [STA] was launched in September 2021. The project had an authentic-looking website and YouTube channel. It managed to trick the investors. In fact, the project claimed to be a “one-stop” service that enabled users to order anything they liked from the nearest farmers in the ”shortest time using blockchain technology.”

Furthermore, the fraud network used to host extravagant celebrations and hand out bonuses to up-line members. A week ago, it had a grand meet-up in a luxurious star hotel banquet hall in Goa, the police revealed. More than 1,000 people attended the meeting. The members who added other members were entitled to bonuses and royalties. According to ANI,

Its leadership is named Pearl, Ruby, Emerald, Topaz, Diamond, Pink Diamond, Blue Diamond, Black Diamond, The Hope Diamond and Koh-I- Noor depending on the number of down-line members under them and STA coin holdings.”

Another major red flag that the police found during the investigation was that the STA website was hosted in Iceland. However, its business activity was targeted and limited to India. Police revealed that it was led by David Gez, a young Hungarian national, who had visited India several times.

Advisory Issued

Aditya Singh, Co-Founder of Crypto India, tweeted about the scam and cautioned people back in January 2023.

Additionally, to avoid any further fraud by the STA gang, an advisory has been released to the general public. People have been advised not to divert funds toward such Ponzi schemes. Furthermore, investors and celebrities have been advised to invest their money in or promote such projects only after checking the credentials of the company.

Overall, the government in India has always maintained a rocky relationship with crypto. Stalwarts feel that after this incident, more rigid regulations could be enforced in this region. Kukreti pointed out that STA was not the only Ponzi scheme being run in India. He added,

“Given the government’s existing cautious stance on crypto and the negative impact of the STA token scam, [there are] high chances that this incident could lead to more rigid regulations being enforced in India’s crypto space.”