The Iranian intelligence ministry (VAJA) says it has busted a large fraud ring which duped people to invest into a fake cryptocurrency dubbed King Money.
A VAJA statement carried by the official IRNA news agency on Wednesday said that scores of people had been arrested over involvement in the fraud scheme.
It said the ring had attracted investment from people through launching a pyramid scheme that offered King Money (KIM) as a cyrpto asset.
The ring had managed to amass huge wealth through encouraging investors to buy KIM and then deceiving then with speculative trading of the fake cryptocurrency, said the statement.
VAJA said the Iranian judiciary will decide on the case in which “numerous people” had lost their investment because of joining the fraud scheme.
The intelligence ministry urged Iranians to exercise more caution when deciding to invest in unstable markets such as cryptocurrencies.
An investigative report published on an Iranian social media analytics website last year had warned that KIM is a fraud network allegedly based in Sweden which had been trying to attract people mostly from Iran to join a pyramid scheme.
The report said that a major Iranian network marketing company had recommended KIM leading to many people to invest in the fake currency.
Iran has had its own problems with the cryptocurrency surge in recent years.
The government has banned trading of crypto assets like bitcoin although certain importers have been allowed to use such currencies to settle payments with foreign suppliers and to avoid US sanctions targeting Iran’s normal banking operations.
Iranian authorities have also intensified their crackdown on cryptocurrency mining in the country as they struggle to prevent power outages that are reportedly caused by excessive use of subsidized electricity by crypto miners.
Reports in local media on Wednesday suggested that the CEO of Tehran’s Stocks Exchange (TSE) had resigned a day after it became known that people had been illegally mining bitcoin in a basement of the TSE’s headquarters in northern Tehran.