Massive Crypto Scam In India Exposes $2.8 Million Fraud: Here’s What Happened

Authorities in the state of Andhra Pradesh, India, are probing into a major cryptocurrency scam that has has left nearly 320 residents in financial ruin, according to a  local news report on 4 Nov 2024.

The scam was reportedly set in motion by promising the victims a fixed monthly return of 10% on an investment of INR 100,00 (approx $1200).

The promise of high returns attracted investors from diverse backgrounds, including businesspeople, traders, and even government employees.

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High Returns Promised To Lure Investors

The scheme was allegedly orchestrated by, Ramanjaneyulu, a resident of Peddavadugur in Anantapur district.

The accused initially built trust among investors through an organic herbal business. He used this venture as a front to establish relationships before introducing the crypto scheme

To make the scheme look genuine, Ramanjaneyulu allegedly used platforms like Binance and OKX. Hence, the victims believed they would receive steady returns, trusting the legitimacy of the platforms being used.

Confirming the report, the local authorities said they had been receiving several complaints over the past few months regarding the fraudulent scheme. Despite the increasing complaints, no formal case had been registered.

Furthermore, authorities are examining how he leveraged personal connections to convince investors. Many victims had invested substantial sums, with some taking loans to participate. For instance, Siva Reddy, a businessman, invested $11,120 while another investor contributed $9500, per the local news report. 

In a similar instance in India, two siblings from Thane, Maharashtra lost over INR 1 crore (approx $120,000) after falling victim to a fraudulent crypto investment scheme. Nineteen family members were booked for allegedly luring the siblings with promises of guaranteed returns, only to disappear with the funds.

Thane: 19 members of family booked for duping siblings of over Rs 1 crore in #cryptocurrency scheme #mumbai #fraud #thane https://t.co/DJhFfih77Y

— The Telegraph (@ttindia) October 3, 2024

The increasing sophistication of crypto scams, where fraudsters leverage personal connections, are on a rise. 

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How Indian Authorities Use Blockchain Forensics To Combat Crypto Fraud

India has seen a surge in cryptocurrency scams. Indian police and law enforcement agencies have increasingly focused on tackling cryptocurrency crimes using advanced tools and leveraging blockchain forensics like the National Cybercrime Reporting Portal (NCRP).

In 2023, the NCRP had received over 100,000 complaints. The financial losses totalled an estimated INR 25,000 crores (nearly $3 billion) over the past three years.

By integrating blockchain intelligence, authorities are working to address frauds and protect investors from scams emerging both locally and internationally.

Moreover, collaborations with entities like Crystal Intelligence and Chainalysis provide the Indian police with actionable insights to track illicit activities linked to cryptocurrencies

https://t.co/ZvRGNQ2SId

— Open Digest (@theopendigest) June 28, 2024

These partnerships have enabled the law enforcement to adopt more effective methods for tracking and prosecuting crypto fraud.

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Regulatory Bodies Step Up To Protect Investors From Crypto Scams

Indian Financial Regulator’s like the Reserve Bank of India(RBI) and the Securities and Exchange Board of India(SEBI) also play an essential role in safeguarding investors through clear guidelines and oversight.

Additionally, SEBI’s Investor Awareness Program highlights the importance of educating investors on the risks associated with high-return promises and the need for due diligence.

Awareness initiatives can equip investors with the knowledge needed to identify and avoid digital scams, fostering a safer environment for legitimate investments.