Indians lost Crores to Crypto Scams: Finance Minister

Indian investors have been scammed out of more than Rs 1,000 crore by a phoney crypto exchange scam.

Crypto Scams

Reetu | Mar 15, 2023 |

Indians lost Crores to Crypto Scams: Finance Minister

Indians lost Crores to Crypto Scams: Finance Minister

Investors hurried to buy the Dubai Coin in the summer of 2021, when crypto assets were still hot property before crashes and frauds. Before the hoax was exposed, the coin’s value rose by 1000% due to false claims that it was Dubai’s official cryptocurrency.

Crypto scammers are constantly looking for new ways to deceive investors and take their digital riches. This includes phishing frauds, pump and dump operations, and the creation of malevolent cryptocurrency exchanges. According to a new analysis from cyber security firm, Indian investors have been scammed out of more than Rs 1,000 crore by a phoney crypto exchange scam.

A cyber security firm CloudSEK reported that it had discovered an ongoing campaign involving many phishing sites and Android-based fraudulent crypto apps. “This large-scale effort lures unsuspecting individuals into a massive gambling scam. According to the research, “several of these fake websites imitate “CoinEgg,” a legitimate UK-based bitcoin trading company.

According to the company, it was approached by a victim who allegedly lost Rs 50 lakh ($64,000) in a phoney bitcoin exchange fraud, in addition to additional fees such as deposit amount, tax, and so on.

How CoinEgg scam works

The analysis by CloudSEK experts revealed that the CoinEgg cryptocurrency scam was carried out by threat actors in stages. “They’re impersonating the actual CoinEgg crypto trading platform by copying the official website’s dashboard and user interface,” the business stated.

The theory is straightforward: a spoof CoinEgg website is being promoted on social media platforms such as Facebook and Telegram. Customers are enticed by the promise of a $100 gift ticket, which will be deposited if they buy in a specific cryptocurrency. Threat actors freeze the cash in the CoinEgg VIP wallet and prevent users from accessing it after enrolling and putting funds on the exchange.

Customers who complain about losing their funds on other sites are approached by hackers via email and asked to supply their bank ID cards and details. These details are subsequently used to commit more heinous crimes. It should be cautioned that numerous phishing applications claiming to be CoinEgg are also being distributed on the internet.

Researchers warn that these applications request undesirable rights upon installation and have been flagged as harmful on multiple systems. “Threat actors have generated multiple bogus CoinEgg domains so far,” researchers stated. When the threat actors are apprehended, they move domains, allowing the scam to go undiscovered.

The fastest approach to limit the threat of such scams, according to CloudSEK, is to identify phishing websites and then suspend them. “Report the phishing campaign to the Cyber Crime Cell and give them with the essential facts to curb the continuous attempts of threat actors. Conduct strong awareness campaigns to educate users/customers about current scams. “As a result, fewer consumers will fall for these scams,” the business stated.

Government cites FATF ammendments

Days after placing cryptocurrency transactions under the purview of anti-money laundering regulations, Finance Minister Nirmala Sitharaman stated that approximately Rs 953 crore has been wasted due to cryptocurrency frauds. She was responding to a question from a DMK MP in the Lok Sabha, and she also mentioned that the Financial Action Task Force has implemented steps to combat money laundering and terror financing through the use of cryptocurrency.

Little clarity on monitoring scams

When asked about procedures to monitor suspicious activity, Sitharaman mentioned Reserve Bank of India bulletins warning individuals about the risks of dealing in virtual assets. The minister, who had not explained the legality of cryptocurrencies for over a year before putting them under money laundering legislation, also highlighted Enforcement Directorate investigations into cryptocurrency exchanges.

Scammers on a rampage?

Recently, Indian investors were victimised by a Rs 500 crore cryptocurrency scam, in which victims were enticed with unrealistic claims of a 200% return. Prior to the scam’s discovery in December 2022, the year saw consumers lose billions due to Terra and FTX scandals that caused exchanges to crash.

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