Indian investors may lose up to $128 million (INR 1,000 crore) in fake crypto exchanges. Most of them were duped because of the lack of information about safe investments in digital assets. A news report on Tuesday said that as investors increasingly turn their attention to cryptocurrencies, scammers are also focusing on this new asset class to find their prey.
$128 Million Crypto Fraud
This was disclosed in a media report based on information provided by cyber security company CloudSEK. The firm came to know of the fraud when an investor who had lost $64,000 (INR 50 lakh) in cryptocurrency scams sought his help.
During the investigation, CloudSEK said it struck an ongoing operation where phishing domains and fake crypto apps are being used to defraud unsuspecting investors.
“We estimate that threat actors have duped victims up to $128 million (approximately Rs 1,000 crore) through such crypto scams,” said Rahul Sasi, founder and CEO of CloudSec.
modus operandi
Explaining the fraud modalities, CloudSEK said that the entire operation starts with the installation of fake crypto trading platforms that impersonate legitimate ones. They replicate the website dashboard and user experience of the official website.
“This massive campaign lures unwitting individuals into a major gambling scam. Many of these fake websites impersonate “CoinEgg”, a legitimate UK-based cryptocurrency trading platform, the report said.
Unsecured investors are contacted and befriended on social media, usually using fake female profiles. They influence the victim to invest in digital assets and start trading.
“The profile also shares a $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 good profits which increases their confidence level. This results in a higher amount of investment, and only then does the scammer attack. Suddenly, investors learn that their accounts have been frozen and they are unable to withdraw their investments. The person who influenced them to invest on social media also moves incommunicado.
As duped investors roam the internet with their complaints, new threat actors emerge under the guise of investigators.
“In order to retrieve the frozen assets, they request the victims to provide confidential information such as ID card and bank details through email. These details are then used to carry out other nefarious activities,” the report said.
Cases of crypto fraud are on the rise
Cases of crypto fraud are frequently reported in India, mostly due to the increasing popularity of digital assets and the lack of a legal framework to regulate them. The Indian government is reportedly planning to introduce a crypto regulation bill once a global consensus is reached.
Recently, Indian police arrested two private investigators on charges of stealing 1,137 BTC while investigating a crypto-based MLM scam involving 87,000 BTC.
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