Indian investors may have lost $128 million (INR 1,000 crore) due to fake crypto exchanges. Most of them have been cheated due to a lack of knowledge about safe investments in digital assets. As investors
Indian investors may have lost $128 million (INR 1,000 crore) due to fake crypto exchanges. Most of them have been cheated due to a lack of knowledge about safe investments in digital assets. As investors increasingly turn their attention to crypto, scammers are also focusing on this new asset class to find their prey, a news article said on Tuesday.
$128 Million Crypto Fraud
The revelation was made in a media report based on information provided by cybersecurity firm CloudSEK. The firm came across 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 uncovered an ongoing operation in which phishing domains and fake crypto apps were used to defraud unsuspecting investors.
“We estimate that threat actors have defrauded up to $128 million (approximately Rs 1,000 crore) via such crypto scams,” said Rahul Sasi, Founder and CEO of CloudSEK.
Describing the modus operandi of the fraud, CloudSEK said the whole operation starts with setting up fake crypto trading platforms that masquerade as legitimate ones. They replicate the website dashboard and user experience of the official website.
“This large-scale campaign is luring reckless individuals into a huge gambling scam. Many of these fake websites are posing as ‘CoinEgg’, a legitimate UK-based cryptocurrency trading platform,” says The report.
Unsuspecting investors are approached and befriended on social media by threat actors who typically use fake female profiles. They trick the victim into investing in digital assets and start trading.
“The profile also shares a $100 credit, as a gift to a particular crypto exchange, which in this case is a duplicate of a legitimate crypto exchange,” the report explains.
Initially, the victim makes handsome profits that boost their level of confidence. This results in an investment of higher amounts, and that’s when the scammer strikes. Suddenly investors find that their accounts are frozen and they are unable to withdraw their investments. The person who encouraged them to invest on social networks is also going into secrecy.
As duped investors roam the Internet with their complaints, new threat actors appear in the guise of investigators.
“To recover the frozen assets, they ask the victims to provide confidential information such as identity cards and bank details, by e-mail. These details are then used to perpetrate other nefarious activities,” the report states.
Crypto fraud cases on the rise
Crypto fraud cases are reported quite frequently in India, mainly due to the growing popularity of digital assets and the lack of a legal framework to regulate them. The Indian government reportedly intends to introduce a crypto regulation bill only when a global consensus is reached.
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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