The Central Bureau of Investigation (CBI) has launched a major operation against two private companies, Shigoo Technology Pvt. Ltd. and Lillian Technocab Pvt. Ltd., and their directors. The CBI conducted searches at 30 locations amongst 10 states and union territories, including Mumbai.
The firms are accused of defrauding investors through a fraud involving an app. The HPZ Token app tricks victims into investing in a Bitcoin mining operation and promises them high returns. The scheme reportedly cheats the public into renting out cryptocurrency mining machines that do not exist.
The CBI has filed charges against the companies and their directors under various sections of the Information Technology Act. These include criminal conspiracy (120B), cheating by personation (419), and cheating (420).
Bitcoin mining is the process by which Bitcoin and other cryptocurrencies create new coins and verify transactions. Despite Bitcoin being a convertible virtual currency, it is not recognised as legal tender in India.
The CBI's searches have resulted in the seizure of SIM cards, email accounts, documents, computer hard drives, mobile phones, and ATM/debit cards. The investigation has also uncovered approximately 150 bank accounts allegedly used by the accused to receive money from investors.
The accused are believed to have used the money to pay previous investors in an attempt to gain their trust and attract new ones. The investment amount may have been turned into cryptocurrency or illegally diverted abroad via hawala channels.
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