Indian authorities have arrested five individuals involved in a cryptocurrency scam that defrauded a businessman of approximately $700,000 (INR 6.16 crore). The perpetrators operated a fraudulent trading platform masquerading as the legitimate Japanese cryptocurrency exchange, ZAIF.
Modus Operandi of the Scam
In May 2024, the victim, a businessman from Berhampur, was contacted via Facebook by a woman claiming to be a Hong Kong-based software developer. She introduced him to the counterfeit trading platform, promising a 200% return on investments. Over a month, the businessman invested funds and was shown fabricated profits to build trust. However, when he attempted to withdraw his earnings, he was asked to deposit an additional INR 89 lakh ($107,000) to unlock his funds—a classic advance fee fraud tactic. Realizing the deception, he reported the fraud, leading to the swift arrest of the suspects in Surat, Gujarat.
Rising Trend of Crypto Scams in India
This incident is part of a growing trend of cryptocurrency-related frauds in India. For instance, authorities in Assam recently dismantled the RSN Crypto scheme, which duped over 2,000 investors with promises of 2% daily returns. Similarly, the Datameer scam defrauded 700 investors out of $114,000, and the HPZ Token scheme involved 299 Chinese-linked entities, resulting in multi-million-dollar losses.
Government’s Response and Regulatory Measures
In response to the surge in crypto scams, Indian law enforcement agencies are intensifying efforts to curb fraudulent activities. The Central Bureau of Investigation (CBI) recently conducted nationwide raids connected to the GainBitcoin Ponzi scheme, one of the country’s largest crypto frauds, which defrauded investors of an estimated $756.48 million (INR 6,600 crore). Authorities seized $2.75 million in crypto assets and incriminating documents during these operations.
Conclusion
The arrest of individuals involved in the $700,000 crypto scam highlights the urgent need for increased vigilance and regulatory measures in India’s burgeoning cryptocurrency market. As digital assets gain popularity, it is imperative for investors to exercise caution and conduct thorough due diligence before engaging in cryptocurrency transactions to protect themselves from potential fraud.
