KUALA LUMPUR – Promising lucrative returns and rewards to investors while hiding behind an online application, the crypto currency investment syndicate ‘AliExchange’ has successfully deceived individuals seeking investment opportunities.
Last Monday, the syndicate was crippled after police arrested nine individuals in Johor, Melaka, Negeri Sembilan, Selangor and Kuala Lumpur involving six men and three women, aged from 32 to 59 years.
Bukit Aman Commercial Crime Investigation Department (NCID) director Datuk Zainuddin Yaacob said the syndicate’s application could be downloaded through the Google Play Store which used a crypto currency trading platform known as ‘AliCoin’.
He said every investor was given access through the AliExchange application after they had downloaded it.
“Investors or victims can also see the rate of return and remuneration promised through the application. To convince the victims, the syndicate has hired European citizens as speakers to hold seminars in hotels in several states, “he told a press conference here, today.
Zainuddin said the victim was required to buy AliCoin (Digital Currency) at RM4.70 each, and the promised profit was five per cent to 15 per cent a month based on the total investment made.
“The minimum amount offered is 10,000 AliCoin equivalent to the value of RM47,000. The victim who was deceived by the syndicate did not get the promised profit.
“(During the raids), the police confiscated, among others, 20 ATM cards issued by various banks, 11 mobile phones, five luxury cars, five laptops, various AliExchange investment documents and RM109,594 in cash,” he said, adding that the total amount seized was estimated at RM2 million.
He said NCID received 27 police reports involving the syndicate with a loss of RM4.7 million and the syndicate is believed to have started operation from last March until October.
Zainuddin said the case was being investigated under Section 117 of the Criminal Procedure Code and Section 420 of the Penal Code.
“People are urged not to easily believe the testimonials and promises of lucrative profit offered in a short time,” he said.
In addition, the public can check and obtain information on the validity of an investment on the website ccid.rmp.gov/semakmule.
Increasing attention
Cryptocurrency schemes have gained traction in recent years due to the slowing economy and rising cost of living, which has prompted many from the middle class to look for additional streams of income.
“Their decision to participate in these schemes may not necessarily be out of pure greed. Some may justify their actions with the desire to create extra income to support their lifestyle or family. There are also those who are aware that it is an illegal investment scheme, but do so anyway, hoping to realise a profit before the scheme collapses,” said an investment expert. .
The expert said cryptocurrency scammers are getting more sophisticated to attract the public. He said these operators, like those who run pyramid schemes, use various tactics to win the trust of unsuspecting investors.
For instance, they incorporate their companies as “Berhad” to give the public the impression that it is a listed company, when it can be a private company with more than 50 shareholders. These operators also pay celebrities to market their products and post photos of them on their websites and social media to enhance their credibility.
“However, many of these photos are misused for promotional purposes. There have been many cases where they went to a public forum and had a photo taken with a well-known personality or credible person. Then, they post it online or use it in their promotional materials, insinuating or mis-representing that they have a partnership or collaboration with that person,” he said in an earlier report filed by a local daily.
“These operators are also known to participate in financial industry and banking events organised at four and five-star hotels, which makes it very hard for investors to distinguish whether the schemes are genuine. They are very good at marketing and being aggressive and even appear on TV shows or featured in newspapers.”
“We know the regulator (Bank Negara) has instructed the closing of the local bank accounts owned by several cryptocurrency exchanges and suspected illegal investment scheme operators in Malaysia,” he added.
Ultimately, there is only so much that regulators can do, he pointed out. The viable long-term solution, and also the most challenging, is consumer education.
“We believe that working with the authorities and media to disseminate information to the public via a sustained awareness campaign will help. The public should learn more about blockchain technology and how to distinguish it from illegal investment schemes,” he said.
