November 13, 2018 10:13 PM
Ambidant Marketing allegedly lured individuals with “halal” investment.
The Bangalore, India-based company Ambidant Marketing may have deceived Muslim investors, according to a recent report from local newspaper Deccan Chronicle. The company had apparently assured investors that its business practices were halal (compliant with Sharia law) and that individuals would receive large returns – upwards of 50 percent – every month if they invested.
However, Ambidant allegedly took investors’ funds and invested them in cryptocurrency, even though (1) Indian financial firms dabbling in crypto cannot legally work with regulated banking entities and (2) the halal status of crypto’s use has not been unequivocally established. In fact, Ambidant was one of over 4,000 companies served a notice for its involvement with cryptocurrency after the Reserve Bank of India’s April ban on financial institutions providing services to virtual currency businesses.
Set up like a typical Ponzi scheme, Ambidant supposedly collected funds from individuals without identifying its investment positions or notifying them that its money was coming from cryptocurrency investments. The funds were then used to pay investors up to the company’s 50 percent promise, though as more investors started to participate, the return rate dropped to 25 percent, 11 percent, and then 9 percent in January 2018, which was when Ambidant last made a significant payout. Afterward, the company made flat payments only to its biggest investors.
The report noted, though, that most Ambidant investors have not received even one-fourth of what they invested.
Although some scholars have defended cryptocurrency use as halal, some believe it’s not compliant with Sharia law because crypto does not have intrinsic value like gold does, nor does virtual currency possess the “standards of reliability” required to dub it a currency. Considering this, it was ultimately deceptive for Ambidant to represent its investments as halal when that is not a guaranteed designation.
Unfortunately, the cryptospace has seen its share of Ponzi schemes. A May report noted that the company OneCoin functioned as a Ponzi scheme, from which Chinese prosecutors were able to recover 1.7 billion yuan (about $244 million as of press). In another example, the recent Fomo3D game/scam was partly inspired by Charles Ponzi (the man who gives the famous scheme its name). Fraudsters have always been a part of the world of crypto, whether in India or elsewhere.
Daniel Putney is a full-time writer for ETHNews. He received his bachelor’s degree in English writing from the University of Nevada, Reno, where he also studied journalism and queer theory. In his free time, he writes poetry, plays the piano, and fangirls over fictional characters. He lives with his partner, three dogs, and two cats in the middle of nowhere, Nevada.
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