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Debit Card Cloning Racket Busted In India; Bitcoin Used To Avoid Detection

The financial institutions and government authorities world over have time and again warned against the potential use of digital currencies such as bitcoin for illicit activities.

According to latest reports, an international syndicate of debit cloners in India was busted on Tuesday and investigation revealed that the perpetrators used bitcoins to avoid detection. The money withdrawn from the ATMs was converted into the digital currency and distributed among the people involved in the crime, as reported by The Times of India.

Pankaj Bhardwaj, operations manager of an Indian Bitcoin exchange CoinSecure, has been arrested and the crime branch is now on the trail of the suspected kingpin, Sumair Sheikh, who is believed to be based in Dubai. Bhardwaj confessed before the authorities to have sent Sheikh bitcoins worth over 30 lakh rupees in the past couple of months. The police recovered cash amounting to 8 lakh rupees from Bhardwaj's residence.

The police also expect the involvement of a bank official in the crimes as the accused had access to key information related to the ATM cards.

CoinSecure said that Bhardwaj was a key member who has contributed to the growth of Bitcoin in India, but has removed him from his position at the company.

“While, acknowledging Pankaj’s contribution to the growth of Bitcoin in India, we as a company have removed him from his position at Coinsecure. This is to enforce our commitment towards maintaining our responsibility towards a clean and progressive Bitcoin system for India”, CoinSecure said in a blog post.

The Reserve Bank of India has maintained a cautious stance on the digital currencies, although recently it has started to appreciate the benefits of the underlying blockchain technology. In December 2013, the RBI had warned users, holders and traders of virtual currencies, about the potential financial, operational, legal, customer protection and security-related risks that they are exposing themselves to, The Times of India reported.

By Shampa Mani
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