Indian Enforcement Directorate Hammers Local Ponzi Scheme

Ambidant Marketing and Investment company an Indian cryptocurrency Ponzi scheme disguising itself as an investment company has dissolved after the Reserve Bank of India made the declaration of cryptocurrency as not legal.

This week Deccan Chronicle reports that the company which was being managed by both the father and son, Syed Fareed and Syed Afag Ahmed did not declare itself as a crypto investment even though it used promises of Halal investments alongside misused Ulemas (Islamic theology scholars) to position itself as a sharia-compliant investment program for Muslim investors.

Duplicitous Investment Strategies

To push its shady transactions, the company according to reports hid under cover of Halal businesses and investments to lure unsuspecting Muslim investors who were the promised fantastic monthly returns of as high as 50 percent per lakh Rupees ($275). Since its main target was Muslim investment, the company allegedly used Ulemas to market its activities as Halal, then invest these takings in cryptocurrencies where it made huge profits, which enabled it to pay the returns it promised for a certain period until the Ponzi scheme grew bigger. Through this period its investors were unaware of its crypto investment positions and exposure.

More people continued investing in the scheme, with payout sizes declining first to 25 percent, then to 11 percent before its last payout in January this year which was 9 percent. Before the last payout, some of its investors earned as high as double of their investment amount, ranging from Rs 50,000(about $685) to over Rs 1 crore (roughly $137,165).

After the RBI declared Bitcoin as illegal tender, India’s Enforcement Directorate which is in charge of financial law enforcement switched its focus to Ambidant transactions. The company with over 4,000 companies got placed under similar investigation, but unlike the majority of the others, its investors were unaware of its cryptocurrency investment exposure.

India’s Enforcement Directorate sad during a statement that;

“During the investigation, it came to the fore that the scheme run by the company is surely a potential Ponzi scheme. In view of the above, ED has written to the RBI (Reserve Bank of India) to have another look into the matter and protect the interest of the investors/depositors at large who are being duped in the name of Islamic banking/halal investment.”

fooling its investors and operating a Ponzi scheme, the company’s activities may well have been at odds with Sharia law itself.

Quite some Islamic scholars are not even in support of cryptocurrency because they are of the belief that cryptocurrency trading is not a Halal practice because digital tokens lack intrinsic value or centralized government support, both of which they say are necessary for it to be considered a currency under Sharia law.

For now, though there is still no consensus of Islamic opinion on this point. In April, it was reported that Mufti Muhammed Abu Bakar, who is a Sharia adviser and compliance officer at Blossom Finance in Jakarta published a paper which classified Bitcoin as Halal, a pronouncement which caused a $1,000 price increase.

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