Morris Coin Fraudulent ICO

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Morris Coin Homepage

Morris Coin was a fraudulent initial coin offering, which made a significant number of misleading claims about their cryptocurrency in flashy promotions with celebrities. Authorities have started to work together to seize the gathered assets.

About Morris Coin

"MORRIS COIN The Best Trending platform! A New Decentralized Cryptocurrency exclusively made For THE modern BUSINESS World and individual traders."

"Morris is a fully decentralized platform. Its main function is an opportunity to create and place smart contracts. The MORRIS Coin - A New Decentralized Cryptocurrency exclusively made For THE modern BUSINESS World and individual traders."

"The Morris Coin is a multifunctional, next-generation cryptocurrency form being developed on Blockchain, using cutting edge smart technology. The Morris Coin will be the first stable digital currency exclusively designed and marketed towards an Ecommerce and Trading Industry to pay for product and services and freedom from dealing with traditional business."

"The Morris Coin will work on blockchain smart contracts which allow the parties to make lawful agreements and executed automatically, offering a new convenient payment system up-to-date, cryptographically-secure and user-friendly. It will increase transparency in the digital exchange supply chain. To power an Ecommerce and Trading network and to create a stable method of exchange The Morris Coins will be released to the public via ICO (Initial Coin Offering). Once live, internet users and Ecommerce members within the system will exchange The Morris Coin as token currency. The Coin lives on the Blockchain."

"It has the same transparency, fluidity, and security price volatility. This gives leverage, robustness and long-term sustainability to The Coin as a digital currency. This is the opposite of a conventional fiat currency which decreases in value each time a Government prints more. The Morris Coin was designed by experts using the latest technology and techniques in cryptocurrency and blockchain. The Morris Coin is at the cutting edge in digital currency, designed for use by an Ecommerce and Trading world as well as private individuals."

"Morris coin is a cry[p]tocurrency that is going to be listed in one of the top exchanges of the world. There is no doubt that Morris coin will open the door for revolutionary technological possibilities."

The Reality

"The coin does not appear to be listed anywhere, but if it’s in the ICO stage, that doesn’t mean it’s fake. It has a one-page website, which is secured by a free CloudFlare SSL certificate. It uses generic images, including one explaining block chain that appears identical to that here."

"The scheme involves a nonexistent cryptocurrency called Morris coin. Nishad and his companies conducted an initial coin offering (ICO) for the coin and collected money from investors. The ED explained that they held “promotional events in the presence of celebrities” and used “flashy websites” to attract investors. The police said that over 900 investors were duped out of 1,200 crore rupees."

What Happened

The Morris coin project promised a blockchain coin, and instead took investor money without delivering anything.

Key Event Timeline - Morris Coin Fraudulent ICO

Date	Event	Description
January 5th, 2022 11:41:50 PM MST	Onmanorama Article	Onmanorama reports that the Enforcement Directorate (ED) of India has uncovered a Morris coin fraud worth Rs 1,200 crore through raids at 11 locations across India, including three in Kerala. Raids were carried out in Malappuram, Palakkad, and Kochi, with one at a cinema company owned by Malayalam actor Unni Mukundan in Palakkad. The ED's investigation revealed that the Morris Coin fraud was orchestrated by a Bengaluru-based racket, involving establishments like Longreach Global and Morris Trading Solutions. Morris Coin, a cryptocurrency developed using Blockchain technology, was used in a Ponzi scheme that cheated many Keralites of crores of rupees. The ED intervention followed complainants' reports of the fraud. The mastermind behind the scheme, Nishad, was arrested for running a multi-layer Ponzi scheme involving investments in Morris coin.
January 6th, 2022	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
January 7th, 2022 5:35:00 PM MST	Business Standard News Article	Business Standard News reports that "At least 1.1 million investors may have been cheated" in the "Morris Coin scam" and that "The companies that were raided include Bengaluru-based Long Rich Technologies, Longrich Global, and Morris Trading Solutions, among others".
January 12th, 2022 9:30:03 PM MST	Bitcoin.com Article	Bitcoin.com reports that the Indian Enforcement Directorate (ED) has confiscated assets worth around $5 million linked to an alleged cryptocurrency scam involving Morris coin, which defrauded investors of $162 million. The scam centered on a non-existent cryptocurrency called Morris coin, with the perpetrators organizing an initial coin offering (ICO) to attract investments. They used promotional events with celebrities and flashy websites to lure over 900 investors, amassing 1,200 crore rupees ($162 million). The ED's investigation revealed that the scammed money was used to buy immovable properties, cryptocurrencies, luxury cars, and to cover expenses for premium hotels and resorts. The seized assets include bank accounts, land, and cryptocurrencies such as ETH, BTC, BNB, YFI, VET, ADA, and USDT, which were converted into Indian rupees.
January 19th, 2022 10:00:47 PM MST	Bitcoin.com Article	The incident is again referenced in a separate Bitcoin.com article on other cryptocurrency scams which are happening in India.

Technical Details

"The scheme involves a nonexistent cryptocurrency called Morris coin. Nishad and his companies conducted an initial coin offering (ICO) for the coin and collected money from investors. The ED explained that they held “promotional events in the presence of celebrities” and used “flashy websites” to attract investors. The police said that over 900 investors were duped out of 1,200 crore rupees."

Total Amount Lost

"Though the investigating agencies peg the scam's size at Rs 1,265-crore, victims, pin stockists who were part of the Morris Coin team, lawyers who have been battling the case in courts for over two years, and police officials indicate that at least 1.1 million investors spread across Kerala, Tamil Nadu, and Karnataka might have lost over Rs 3,000"

"Cryptocurrencies such as ETH, BTC, BNB, YFI, VET, ADA, and USDT, valued at ₹25,82,794, and maintained at Indian and international crypto exchanges, were found. They were purchased out of the proceeds of crime."

The total amount lost has been estimated at $162,000,000 USD.

Immediate Reactions

TBD

Ultimate Outcome

"Though the investigating agencies peg the scam's size at Rs 1,265-crore, victims, pin stockists who were part of the Morris Coin team, lawyers who have been battling the case in courts for over two years, and police officials indicate that at least 1.1 million investors spread across Kerala, Tamil Nadu, and Karnataka might have lost over Rs 3,000"

"Indian authorities have been working on several cryptocurrency scam cases. Earlier this month, the country’s Enforcement Directorate (ED) seized assets worth about $5 million in an alleged cryptocurrency scam involving Morris Coin."

"After the arrest of Kannur native Nishad, many transactions under the wraps were unearthed. Nishad, Managing Director of Longreach Technologies, was arrested on October 2020 for operating a multi-layer Ponzi scheme which collected Rs 15,000 people from over 11 lakh people to invest in Morris coin."

"Earlier this week, the Enforcement Directorate conducted raids at 11 locations across the country regarding a fake cryptocurrency called Morris Coin that floated an “initial coin offering” similar to an initial public offering."

"The companies that were raided include Bengaluru-based Long Rich Technologies, Longrich Global, and Morris Trading Solutions, among others"

Bitcoin.com reports that the Indian Enforcement Directorate (ED) has confiscated assets worth around $5 million linked to an alleged cryptocurrency scam involving Morris coin, which defrauded investors of $162 million. The scam centered on a non-existent cryptocurrency called Morris coin, with the perpetrators organizing an initial coin offering (ICO) to attract investments. They used promotional events with celebrities and flashy websites to lure over 900 investors, amassing 1,200 crore rupees ($162 million). The ED's investigation revealed that the scammed money was used to buy immovable properties, cryptocurrencies, luxury cars, and to cover expenses for premium hotels and resorts. The seized assets include bank accounts, land, and cryptocurrencies such as ETH, BTC, BNB, YFI, VET, ADA, and USDT, which were converted into Indian rupees.

the Enforcement Directorate (ED) of India has uncovered a Morris coin fraud worth Rs 1,200 crore through raids at 11 locations across India, including three in Kerala. Raids were carried out in Malappuram, Palakkad, and Kochi, with one at a cinema company owned by Malayalam actor Unni Mukundan in Palakkad. The ED's investigation revealed that the Morris Coin fraud was orchestrated by a Bengaluru-based racket, involving establishments like Longreach Global and Morris Trading Solutions. Morris Coin, a cryptocurrency developed using Blockchain technology, was used in a Ponzi scheme that cheated many Keralites of crores of rupees. The ED intervention followed complainants' reports of the fraud. The mastermind behind the scheme, Nishad, was arrested for running a multi-layer Ponzi scheme involving investments in Morris coin.

Total Amount Recovered

"Cryptocurrencies such as ETH, BTC, BNB, YFI, VET, ADA, and USDT, valued at ₹25,82,794, and maintained at Indian and international crypto exchanges, were found. They were purchased out of the proceeds of crime."

There do not appear to have been any funds recovered in this case.

Ongoing Developments

TBD

Individual Prevention Policies

The Morris Coin project did not even have a blockchain. A basic level of research or test purchasing and interacting with a small amount of the "coin" could have uncovered this. More extensive reviews into the team and setup would have also shown that there was no multi-signature setup, time lock, or community governance of the treasury. An in-depth third party review of the project would have shown that it was trivial for the "team" to walk away with the funds and deliver nothing.

Any time that you are promised any profit or benefit in exchange for an initial payment, smart contract approval, or deposit, pay special care as to whether the entity making that offer is trustworthy, actually who they say they are, and has the means to fulfill what they're promising. There are no magic algorithms providing guaranteed returns from trading or mining. Trading on average will lose money. Mining is expensive and complex. No one is going to immediately send back more than you sent them. NFT projects will rarely announce a surprise mint in only a single location. Are you fully prepared for the event your money is kept and nothing is delivered in return?

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Members of the Morris Coin team could have ensured that funds were stored in a proper multi-signature wallet with reputable key-holders, which would have prevented the theft of the funds without the consent of the vast majority of key holders. For other wallets and exchanges, increased user education can help users avoid participating in risky projects.

Morris Coin Platform

The Morris Coin team could have ensured that funds were stored in a proper multi-signature wallet with reputable key-holders. This would require multiple members of the team to approve any funds from being spent outside of the intended development path.

All wallets, minting functions, and critical infrastructure should be implemented with a multi-signature requirement, with a recommended minimum of 3 signatures required. This means that making important changes or approving spending will require the keys held by at least 3 separate individuals within the organization to approve. The multi-signature should be implemented at the lowest layer possible, all key holders should have security training, and all key holders should be empowered and encouraged to exercise diligence.

Other Wallets And Exchanges

Increased user education can help users avoid participating in risky projects, and point users to the right tools to validate projects. An industry insurance fund can assist affected users.

Never take for granted the limited knowledge of users of your service and their tendency to skip past provided information. It is recommended to design a simple tutorial and quiz for new users which explains the basics of seed phrases, strong password generation, secure two-factor authentication, common fraud schemes, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space. This tutorial and quiz should ensure their understanding and be a standard part of the sign-up or download process which is difficult or impossible to skip.

Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

There were a large number of easily identifiable issues with the Morris Coin proposal and setup, which could have been identified by a third party fairly easily. An industry insurance fund creates a incentive mechanism for quality reviews and information, and can assist affected users in the event of loss.

All platforms should undergo published security and risk assessments by independent third parties. Two assessments are required at founding or major upgrade, one after 3 months, and one every 6 months thereafter. The third parties must not repeat within the past 14 months. A risk assessment needs to include what assets back customer deposits and the risk of default from any third parties being lent to. The security assessment must include ensuring a proper multi-signature wallet, and that all signatories are properly trained. Assessments must be performed on social media, databases, and DNS security.

Set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services within the country, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.