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Indian Investors

Indian Investors Could Have Lost $128 Million to Fake Crypto Exchanges: Report  

Indian investors may have lost $128 million (INR 1,000 crore) to fake crypto exchanges. Most of them were cheated due to a lack of knowledge about safe investments in digital assets. As investors increasingly shift their attention to crypto, scammers are also focusing on this new asset class to find their preys, said a news report on Tuesday.

$128 Million Crypto Fraud

The revelation was made in a media report based on information provided by cyber security company CloudSEK. The firm stumbled upon the fraud when an investor who had lost $64,000 (INR 50 lakh) to cryptocurrency scams sought its help.

During the investigation, CloudSEK said it hit upon an ongoing operation where phishing domains and fake crypto apps are being used to scam unsuspecting investors.

“We estimate that threat actors have defrauded victims of up to $128 million (about Rs 1,000 crore) via such crypto scams,” said Rahul Sasi, Founder and CEO of CloudSEK.

Modus Operandi

Describing the modus operandi of the fraud, CloudSEK said the entire operation begins with the setting up of fake crypto trading platforms that impersonate legitimate ones. They replicate the website dashboard and user experience of the official website.

“This large-scale campaign entices unwary individuals into a huge gambling scam. Many of these bogus websites impersonate “CoinEgg”, a legitimate UK-based cryptocurrency trading platform,” the report said.

Unsuspecting investors are approached and befriended on social media by threat actors who typically use fake female profiles. They influence the victim to invest in digital assets and start trading.

“The profile also shares $100-dollar credit, as a gift to a particular crypto exchange, which in this case is a duplicate of a legitimate crypto exchange,” the report explained.

Initially, the victim makes handsome profits that boost their trust level. This results in an investment of higher amounts, and that’s when the scammer strikes. Suddenly, the investors find that their accounts are frozen and they are unable to withdraw their investments. The person who influenced them to invest on social media also goes incommunicado.

As the duped investors go around with their complaints on the internet, new threat actors appear in the guise of investigators.

“To retrieve the frozen assets, they request victims to provide confidential information such as ID cards and bank details, via email. These details are then used to perpetrate other nefarious activities,” the report said.  

Crypto Fraud Cases on the Rise

Crypto fraud cases are reported quite frequently in India, mostly due to the growing popularity of digital assets and a lack of a legal framework to regulate them. The Indian government is reportedly planning to bring a crypto regulation bill only when a consensus is reached at the global level.

Recently, Indian police arrested two private investigators for stealing 1,137 BTC while investigating a crypto-based MLM scam involving 87,000 BTC.


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