A suspected cryptocurrency investment fraud spread across four Tamil Nadu districts has taken a tragic turn after a 25-year-old man, who allegedly encouraged several people to invest in the scheme, died by suicide amid pressure from investors who were unable to recover their money.
The case involves FQL Investment Trading, FQL Exchange App and VG Investment Group Syndicate. Police allege that agents promoted the operation as a cryptocurrency trading opportunity and promised unusually high daily returns, including claims that investments could double within 40 to 45 days.
The alleged operation had been active for around seven months across Madurai, Dindigul, Virudhunagar and Sivagangai. Six cases have been registered so far, while the Tamil Nadu Police has transferred the investigation to the Economic Offences Wing because of the scale of the alleged network, cryptocurrency transactions and suspected international links.
Algoritha Security Launches ‘Make in India’ Cyber Lab for Educational Institutions
What is an MLM-crypto investment scheme?
Multi-level marketing, or MLM, is a structure in which participants can earn money by bringing other people into a network. An investment scheme becomes particularly risky when recruitment is combined with promises of unusually high or guaranteed returns.
In this case, police allege that local agents persuaded people to invest through cash, G-Pay and UPI. Part of the money was allegedly converted into Tether, or USDT, a cryptocurrency designed to maintain a value close to the US dollar, and transferred to FQL or VG-linked wallets.
The alleged problem emerged when investors tried to withdraw their money. According to the preliminary investigation, withdrawals failed, balances became inaccessible and some investors were asked to make additional payments. The application was subsequently shut down, leaving investors unable to access the balances displayed to them.
Investors turned to the local agent for their money
A Raja, the 25-year-old who died in Dindigul district, had reportedly persuaded several people to invest in the scheme.
When those investors could not withdraw their money, they allegedly approached Raja and demanded that he return the amounts they had invested through him. A senior police officer told NDTV that Raja had been facing pressure from people whom he had encouraged to invest.
Following his death, families who said they had lost money reportedly gathered at his residence, hoping that some of the money collected through him might still be available.
His precise role is now part of the investigation. Police will have to establish whether he was simply a local agent who believed the scheme was genuine or whether he knowingly participated in the alleged fraud. The circumstances surrounding his death are also being investigated.
₹25 crore loss is only a preliminary figure
Complaints have emerged from victims across the four districts. Police have so far estimated the losses at at least ₹25 crore based on complaints received, but officials have stressed that this is not a final assessment. The amount could increase as more victims come forward and investigators reconcile the financial records.
The scale of the complaints has also raised concerns about how many people may have been recruited through the local-agent structure.
Six cases have been registered — three in Madurai and one each in Dindigul, Virudhunagar and Sivagangai. A senior police officer told NDTV that 21 people had been arrested, including the alleged promoter of the operation. However, the official police communication reported by PTI said 17 accused had been arrested and remanded to judicial custody, showing that the arrest figure was changing as the investigation progressed.
Police have also frozen 13 bank accounts linked to suspects. These accounts will be examined alongside the cryptocurrency wallets to reconstruct where investors’ money went.
EOW takes over as investigators follow the crypto trail
The Tamil Nadu Police has transferred all six cases to the Economic Offences Wing, a specialised unit that investigates large-scale economic offences.
The decision reflects the complexity of the alleged money trail. Investigators now need to connect cash and UPI payments made by investors with bank accounts, cryptocurrency conversions and wallets allegedly linked to FQL and VG.
The investigation will also examine transactions involving USDT and wallets associated with Binance, as well as possible overseas links.
That digital trail could become crucial to the recovery effort. Cryptocurrency transactions are recorded on blockchains, but tracing the person ultimately controlling a wallet can still require linking wallet activity with exchanges, bank accounts, devices and other identifying information.
For victims, the investigation will also have to answer a more basic question: how much money was actually collected, where did it go and who ultimately controlled it?
The immediate priority is therefore not simply making more arrests. Investigators need to reconstruct the entire network — from the people who recruited investors on the ground to the bank accounts and cryptocurrency wallets through which the money allegedly moved.
What this means for you: Promises that an investment will double in 40–45 days should be treated as a major warning sign, particularly when the scheme depends on recruiting more investors or asks you to send money to personal accounts or unfamiliar wallets. Before investing in any cryptocurrency-linked platform, independently verify who operates it and never rely solely on an agent’s promises, screenshots or displayed profits.
If you have already lost money, preserve your payment records, UPI details, wallet addresses, screenshots and conversations with the agents. Report the fraud to your bank and through 1930 or the National Cyber Crime Reporting Portal as quickly as possible.
