India’s Ruling BJP Accused of $763 Million Bitcoin Sca

Former leaders of India’s Congress party have accused the country’s ruling government of participating in a $763 million bitcoin scam, local news outlet NDTV reported Friday. The so-called “multi-layered scam” amounts to several billions more, a sign that India is becoming a hotbed for criminal activity involving digital currency.

BJP Linked to Major Bitcoin Scam
According to CCN and NDTV, Congress leaders from the state of Gujarat have linked the Bharatiya Janata Party (BJP) to an elaborate bitcoin scam they say totaled as much as $12 billion. Direct involvement from BJP members is estimated at $763 million.

Congress party spokesperson Shaktisinh Gohil issued the following statement:

“A new mega bitcoin scam has been unraveled in Gujarat. The finger of suspicion of this massive scam of illegal cryptocurrency directly points to several top Bharatiya Janata Party leaders and a mastermind — an absconding BJP leader and former MLA Nalin Kotadiya.”

Gohil added that the scam opened up a Pandora’s box where illegal “transactions, kidnappings, extortion of cryptocurrency using CBI/police/government authorities at the behest of top BJP leaders in Gujarat is a norm.”

The scam allegedly traces back to Shailesh Bhatt, a Gujarat builder who participated in the now infamous Bitconnect ponzi scheme.

BJP has denied allegations that its members participated in any crypto-related scam and has defended its local police force against any wrongdoing.

While owning bitcoin is not illegal in India, trading it via government-regulated bank accounts is not permitted. The Reserve Bank of India (RBI) has barred regulated financial institutions from serving digital currency exchanges and their users.

Crypto Scams on the Rise
Scams, money laundering and other illicit activities have long been associated with cryptocurrency. Earlier this week, a report from U.S. fintech security firm CipherTrace found that $1.2 billion in cryptocurrency has been laundered through bitcoin tumblers and privacy coins such as Zcash and Monero. As Hacked reported Wednesday, stolen cryptocurrencies this year have surged to three times the level for all of 2017, a sign that digital currency exchanges were more vulnerable than ever before.

The criminal dark web isn’t just targeting digital currency exchanges, but initial coin offerings (ICOs) that have yet to make their way on to trading platforms. It has been estimated that some 10% of all ICO funds raised in 2017 were stolen by cyber criminals. According to a recent study from Carbon Black, there are 12,000 marketplaces and 34,000 offerings targeting cryptocurrency theft. The most popular method of attack, malware, costs an average of $224 to implement.

Privacy coins are also growing in popularity, with Monero emerging as one of the most popular cryptocurrency on the dark web, according to a study by Recorded Future. Among the more well known digital currencies, Zcash is often considered to have the strongest privacy features, though a lack of fungibility makes it less appealing than bitcoin, Monero and others.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading

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