Fraudsters are increasingly exploiting Indian crypto investors, taking advantage of the craze for the digital asset industry despite regulatory uncertainty. As per sources, in March 2021, Kapil Singh, a 24-year-old employee at a private firm in the country’s capital Delhi, decided to invest in Bitcoin and Ethereum, through a US-based trading firm that seemed legitimate. Months later, Singh found out the site was fake.
Singh is among several people to have been fallen victims of scammers, who are using fake cryptocurrency or apps to cheat people. As per data from the National Cybercrime Reporting Portal, more than 50 complaints were registered in the capital from January to June in 2021. Maharashtra recorded the highest with 72 cases lodged. Delhi reported the second-highest complaints of crypto scams. That being said, the unofficial number might be higher.
According to Delhi Police, several of these gangs operating fake apps, phishing websites, or call centers claiming to deal in the crypto market have been busted over the last year. In the last 12 months, Deputy Commissioner of Police [DCP] KPS Malhotra said, more than 20 individuals have been arrested in three cases and $4 million in assets was frozen by the CyPad team in Delhi. The duped money is estimated to be roughly $26 million.
How to avoid falling for such crypto scams?
Similar to the stock market, the crypto market has exchanges or brokers that act as facilitators. These trading platforms often charge a fee or commission for each transaction. Some even offer rewards for hitting a milestone, others provide a joining bonus. Police said a majority of fraudsters use the rewards scheme along with the promise of high returns to lure investors. They create fake apps and invite people using social media bulk messaging and marketing to invest.
In a note of caution, DCP Malhotra said,
“We have advised the public to invest wisely. Check websites and accounts and do their research. Most of the accused present rosy pictures and schemes that aren’t valid. One must check for valid schemes and not invest money to get instant returns. There are platforms or exchanges to invest in cryptocurrencies that have authentic websites. We also have a helpline to prevent such scams.”