Monday, June 5, 2023

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CB takes stern action against Ponzi scammers resorting to Crypto Fraud

By: Staff Writer

Colombo (LNW):Central Bank has taken action to crack down on Ponzi scammers resorting to Cripto Fraud pilfering billions of rupees from thousands of Sri Lankans

Ponzi scammers are exacerbating the existing economic misery of thousands of Sri Lankans with ambitions earn more money from investments by swindling their savings with fake crypto currency schemes; informed sources divulged

In March Central Bank made public that it received several complaints indicating that entities conduct and/or have conducted scheme/s prohibited in terms of section 83C of the Banking Act No. 30 of 1988.

Therefore, the CBSL began investigations in terms of section 83C of the Banking Act, No. 30 of 1988 to ascertain whether the identified three entities violate and/or have violated the provisions of section 83C of the Banking Act, No. 30 of 1988.

They are ( i) Fast 3Cycle International (Pvt) Ltd (F3C),(ii) Sport Chain App, Sports Chain ZS Society Sri Lanka and (iii) OnmaxDT

Accordingly, the Central Bank requested the Attorney General to consider instituting criminal proceedings in terms of the provisions of this Act.

In a recently filed case , Colombo Chief Magistrate Prasanna Alwis this week ordered eight investment accounts opened in the United States by the directors of OnmaxDT Ltd., an illegal Sri Lankan crypto Ponzi or pyramid scheme to be frozen immediately.

The directors had opened the accounts with US Company and invested Rs. 430 million for a period of six months.

Reportedly this is the first time a Sri Lankan court has issued an order to a financial company based in the United States.

Following the order, the CID told the courts the CEO of will be informed of the decision via email.

Accounts under the titles of OnmaxDT Ltd (Sri Lanka), Onmax Ltd (Australia), two joint accounts under the names of Dhananjaya Gayan, Sampath Sandaruwan Lenaduwage, Saranga Randika Jayatissa and individual accounts belonging to Vikramapeli Gedera Chandrakanti and Kahadawa Arachchige Athula Indika Sampath will be frozen.

On 28 March the court also issued a travel ban on six directors of OnmaxDT Sampath Sandaruwan, Athula Indika Sampath, Gayashan Abeyratne, Madhuranga Prasanna, Saranga Randika, and Dhananjaya Jayan for their alleged involvement in a pyramid financial fraud of $ 100 million.

On the day the magistrate also ordered the heads of Bank of Ceylon, Central Finance, Nations Trust, Seylan Bank and People’s Trust banks to freeze 57 accounts owned by the suspects.

Charges have been filed against the suspects under Section 83 of the Banking Act and Section 03 of the Money Laundering Act.

The Criminal Investigations Department (CID) has launched an investigation into a similar financial fraud last year which has involved Rs.14 billion with 8,000 people being victims in a fake crypto currency scheme.

Details of this Crypto currency Ponzi (Pyramid) scam have been revealed following a complaint filed in a civil lawsuit by a disgruntled investor Sudath Ranjan Silva at Colombo Chief Magistrate’s Court in October 2022.

More than 1000 Sri Lankans in one district alone reported losing around Rs. 8 billion in investments made in Sports Chain crypto currency platform founded by Zhang Kai, a Chinese and Shamal Bandara, according to documents submitted to Sri Lankan authorities.

A separate complaint was made by several disgruntled investors to the Inspector General of Police claiming that around 8000 persons countrywide including doctors, engineers and teachers have joined in the Sports Chain Society Sri Lanka, an investor of the scheme said.

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