A cryptocurrency scam operator in India has landed in jail, exposing the murky world of fake digital coin schemes that are proliferating across the globe.
BM Jagadeesha, owner of 3G Coin, was arrested in Bengaluru on July 16 by the Cyberabad cyber crime team and remains in custody. Police say his operation followed the textbook playbook of multilevel marketing fraud schemes operating out of India, but with a digital twist.
Jagadeesha registered 3G Coin using fake names, claiming the company was based in Germany, England and Wales. The fictitious management team didn't exist. Instead, he ran a classic Ponzi scheme wrapped in cryptocurrency language.
Investors paid up to 10,000 euros every three months for 3G Coins, digital tokens whose value Jagadeesha himself controlled. He promised returns that should have raised red flags immediately: the coins would gain 180 percent in value within two years. Affiliates also earned commissions by recruiting others into the scheme, the hallmark of MLM fraud.
The cash flowed through five bank accounts Jagadeesha controlled, including at least one opened in the name of a dead person. Police have charged him with cheating, forgery, fraud, impersonation and breach of trust—marking the first cryptocurrency crime case lodged in Hyderabad.
"People should not get tempted if they are offered enormous amounts of profit because there is no such company which can earn 180 times profit in two years," warned Md Riyazuddin, a cyber crimes inspector with Cyberabad police.
The bust revealed something more troubling: 3G Coin is just one of several identical schemes operating globally. WowCoin, OneCoin, RichCoin, and LitCoin all function the same way, police said. They prey on Bitcoin's reputation and success, using the legitimate cryptocurrency as a cover story.
"These fraud companies take advantage of Bitcoin's success and try to lure investors," Riyazuddin explained.
OneCoin, reviewed by BehindMLM in September 2014, operates on identical fraud mechanics: investors buy points whose value the company controls, making withdrawal increasingly difficult while losses mount. WowCoin, operating under the name Wow Digit, follows the same playbook.
The problem for Indian authorities: while they dismantled 3G Coin, OneCoin and WowCoin operate outside India's borders, putting them beyond the immediate reach of local police. Whether Indian cyber crime units are actively pursuing these schemes remains unclear.
The arrest of Jagadeesha sends a message to investors in these schemes. There's no magic cryptocurrency that doubles your money. Behind every promise of impossible returns sits someone collecting the cash and running.
🤖 Quick Answer
What is the 3G Coin scheme and how does it operate?3G Coin is a cryptocurrency fraud operated by BM Jagadeesha from Bengaluru. The scheme uses multilevel marketing tactics combined with digital currency mechanics. Investors paid up to 10,000 euros quarterly for tokens whose value was artificially controlled by the operator, implementing a classic Ponzi structure masked by cryptocurrency terminology and fake international company registrations.
Why was BM Jagadeesha arrested by Indian authorities?
Jagadeesha was arrested by Cyberabad cyber crime police on July 16 for operating an illegal investment scheme. He registered 3G Coin using fraudulent identities, falsely claiming the company operated from Germany, England, and Wales. The fictitious management team and artificially controlled token values constituted criminal fraud under Indian cybercrime legislation and investment protection laws.
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