Indians Have Lost Up to INR 1,000 Cr In Crypto Scams So Far: Report

Cyber­se­cu­ri­ty com­pa­ny Cloud­SEK has esti­mat­ed that Indi­an vic­tims have lost up to INR 1,000 Cr in var­i­ous cryp­tocur­ren­cy scams so far.

“As investors shift their focus to the lucra­tive cryp­tocur­ren­cy mar­kets, scam­mers and cheats turn their atten­tion to them as well. We esti­mate that threat actors have defraud­ed vic­tims of up to INR 10 Bil­lion via such cryp­to scams,” Cloud­SEK chief oper­at­ing offi­cer (CEO) Rahul Sasi said.

As part of its ongo­ing oper­a­tion against fake cryp­tocur­ren­cy exchanges, Cloud­SEK said it uncov­ered a gamut of phish­ing domains and Android appli­ca­tions, with the key­word ‘CoinEgg’, that were used to dupe the victims. 

“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 cyber­se­cu­ri­ty firm said in a release. 

The plat­form began its probe after it was approached by a vic­tim who lost INR 50 Lakh in one such scam.

The Modus Operandi 

The com­pa­ny said that the fake cryp­to exchanges oper­at­ed in a phased man­ner to dupe vic­tims. These fake exchanges appar­ent­ly reg­is­tered fake domains that imper­son­at­ed legit­i­mate trad­ing plat­forms. Accord­ing to Cloud­SEK, these plat­forms emu­lat­ed the dash­board and user expe­ri­ence to lure the victims.

The cyber­crim­i­nals also cre­at­ed fake social media pro­files under female alias­es to lure vic­tims and entice them into invest­ing in cryp­tocur­ren­cies. After­wards, these so-called han­dles would share a $100 cred­it with the vic­tim of the dupli­cate cryp­to exchange. 

The vic­tim would ini­tial­ly gain high­er returns from the cred­it, post which the scam­mer would con­vince them to invest a high­er amount, promis­ing bet­ter returns. Once the vic­tim added their own mon­ey to the wal­let, the scam­mers would freeze the account and decamp with the money.

Vic­tims of the phish­ing web­sites were told to pay 22% of their earn­ings as tax before they could reclaim their funds. It would also add a con­di­tion of ‘impo­si­tion of deposit’ on the vic­tim, if the earn­ings crossed $250K. The plat­forms per­pe­trat­ing the scam would then order a per­ma­nent freeze of the account if the two con­di­tions were not met. 

Some vic­tims were also duped after­wards under the ruse of inves­ti­ga­tion. Cloud­SEK found that the same or a new set of scam­mers would then approach the vic­tims, offer­ing their assis­tance in retriev­ing the frozen assets. These cyber­crim­i­nals would then col­lect oth­er con­fi­den­tial infor­ma­tion such as bank details and email id to per­pe­trate oth­er crimes.

The probe by the Sin­ga­pore-based com­pa­ny also found that once a fake domain was tak­en down, the threat group would keep com­mu­ni­cat­ing with unsus­pect­ing vic­tims, redi­rect­ing them to alter­nate domains to access the fake cryp­to exchange.

Sasi urged the author­i­ties to iden­ti­fy cryp­to-relat­ed phish­ing web­sites. He fur­ther called on gov­ern­ment offi­cials, cryp­to exchanges and inter­net ser­vice providers (ISPs) to raise aware­ness and take action against such cybercriminals. 

Accord­ing to an Inc42 analy­sis, investors across the globe lost more than INR 72,000 Cr in 12 cryp­to scams that involved Indi­ans or had Indi­an-ori­gin founders. From the infa­mous Bit­con­nect to Gain­Bit­coin, these scams have shak­en investor con­fi­dence, with many call­ing for strict laws to curb such instances.