Central Bank of Sri Lanka to Sue Individuals Involved in $47 Million Encryption Scam
According to reports, the Central Bank of Sri Lanka is preparing to file a lawsuit against a group of individuals suspected of organizing a $47 million encryption scam. According t
According to reports, the Central Bank of Sri Lanka is preparing to file a lawsuit against a group of individuals suspected of organizing a $47 million encryption scam. According to the local financial crime Investigation Bureau (FCID), the so-called Ponzi scheme was created by nine people. They promoted an encryption project called Sports Chain and a related coin that had never actually existed. The Sri Lankan authorities have noticed suspicious activities after last year’s investigation by Al Jazeera Television. FCID has filed a lawsuit in court. The lawsuit claims that they defrauded about 15 billion rupees (approximately $46.6 million) from over 8000 Sri Lankans. Some suspects were detained in 2022 but were released on bail in December. FCID claims that the fraudster is suspected of investing some of the funds received from the victims in expensive cars and luxury apartments in Colombo, Sri Lanka.
Sri Lankan authorities have discovered fraudulent encryption schemes worth $47 million
The Central Bank of Sri Lanka is set to take legal action against a group of individuals who are suspected of organizing a $47 million encryption fraud. The fraudsters are known to have created a so-called Ponzi scheme, by promoting a non-existent encryption project called Sports Chain and issuing a related coin. The Sri Lankan authorities became aware of the fraudulent activities after an investigation by Al Jazeera Television last year, and the local financial crime Investigation Bureau (FCID) has filed a lawsuit in court.
The Ponzi Scheme Creator
Reports identify nine people believed to have been involved in creating and orchestrating the Ponzi scheme in question. FCID claims that the fraudsters defrauded about 15 billion rupees (roughly $46.6 million) from over 8000 Sri Lankan citizens. Although some suspects were detained in 2022, they were later released on bail in December. FCID further alleges that the perpetrators may have invested some of the funds received from the victims in purchasing expensive cars and luxury apartments.
The Implications of Encryption Fraud in Sri Lanka
The news of the Ponzi scheme has highlighted the need for Sri Lanka to tighten regulations around digital currency and encryption. Encryption, by nature, provides a high level of security and anonymity; however, it also means that fraudulent activities can be difficult to track and prosecute. This is especially concerning given that the rise of digital currencies has led to a proliferation of scams globally.
Regulation of Encryption in Sri Lanka
The Sri Lankan government has started taking steps to regulate the cryptocurrency market in the country. In December 2021, the Central Bank of Sri Lanka issued new guidance to banks and financial institutions on the identification of money laundering and terrorist financing risks. Additionally, the government is planning to introduce a regulatory framework for cryptocurrencies to ensure they are properly monitored and regulated.
What Happens Next?
The lawsuit filed by the FCID means that a court hearing will be scheduled in the near future. If found guilty, the defendants could be subjected to imprisonment and/or fines. This move is a significant step towards catching fraudsters involved in cryptocurrency scams and will help set a precedent in Sri Lanka.
Conclusion
The Sports Chain encryption scam is another reminder of the need for tighter regulation around cryptocurrency and encryption technologies globally, especially in countries such as Sri Lanka where digital transformation is in full gear, but the regulatory framework is dependent on the pace of technological advance. This case is an excellent opportunity to tighten control, establish precedents, bring criminals to justice and protect citizens from financial harm.
FAQs
1. What is the Sports Chain encryption scam?
– Sports Chain encryption scam is a Ponzi scheme orchestrated by a group of individuals that promote a non-existent encryption project.
2. Why is the Sri Lankan government taking steps to regulate the cryptocurrency market?
– The rise of digital currencies has led to a proliferation of scams globally, and the government wants to monitor and regulate cryptocurrencies to ensure they are properly regulated.
3. What could happen to the defendants if found guilty?
– The defendants could be subjected to imprisonment and fines.
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