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Saturday October 29, 2022 6:02 pm
Saturday October 29, 2022 6:02 pm
ECONOMYNEXT – Sri Lanka Police arrested three more locals suspected to have involved in the cryptocurrency scam that was run by a Chinese couple, Police Media Spokesman Nihal Thalduwa said said on Saturday.
The Police Criminal Investigations Department arrested the Chinese couple and a local on early this month for committing an estimated 14 billion rupee crypto currency fraud.
The local arrested early this month has been later released on bail after produced to the court.
The scam has been continuing since 2020 from an office in World trade Centre and is involved with a volume of 14 billion rupees, Thalduwa told EconomyNext.
The three locals later arrested are yet to be produced to the court, he said.
The police suspect at least around 8,000 people have been scammed by the suspects in the past 2 years.
Cryptocurrency, which is not illegal in many developed countries, started out as a retail phenomenon, but institutional interest from exchanges, companies, banks, hedge funds and mutual funds is growing fast because of higher returns.
Former Minister of Digital Infrastructure Namal Rajapaksa attempted to legalize cryptocurrency after the Covid-19 pandemic outbreak when people had concerns over exchanging money physically. However, Sri Lanka central bank has not approved cryptocurrency yet.
Crypto lenders offer much higher returns – at the very top end as much as 20 percent, though rates depend on the tokens being deposited.
Crypto lenders make money by lending – also for a fee, typically between 5-10 percent – digital tokens to investors or crypto companies, who might use the tokens for speculation, hedging or as working capital. The lenders profit from the spread between the interest they pay on deposits and that charged on loans.
Crypto currency is banned in China and police is yet to explain how Chinese got involved in the fraud.
The suspects have lured the people by persuading them to invest high amounts in hopes of a massive
returns.
Cryptocurrency (or “crypto”) is a class of digital assets created using cryptographic techniques that
enable people to buy, sell or trade them securely.
Unlike traditional fiat currencies controlled by national governments, cryptocurrencies can circulate
without a monetary authority such as a central bank.
Most other cryptocurrencies are supported by a technology known as blockchain, which maintains a
tamper-resistant record of transactions and keeps track of who owns what.
The use of blockchains addressed a problem faced by previous efforts to create purely digital currencies: preventing people from making copies of their holdings and attempting to spend it twice.
In May this year, value of crypto assets eroded by nearly $800 billion within a month as the end of easy monetary policy diminished appetite for risk assets among investors. (Colombo/ Oct 29/2022)
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