Fake Crypto Exchanges Reportedly Dupe Indian Investors Of Nearly Rs 1,000 Crore, Claims New Report

Fake cryptocurrency exchanges have duped Indian investors of more than $128 million (nearly Rs 1,000 crore) as the global crypto market tanks, a new report claimed yesterday, as per IANS.

Cyber-security company CloudSEK reportedly said that it has uncovered an ongoing operation involving several phishing domains and Android-based fake crypto applications.

"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," according to the report.

CloudSEK was reportedly approached by a victim who allegedly lost Rs 50 lakh ($64,000) to such a cryptocurrency scam, in addition to other costs such as deposit amount, tax, etc.

"We estimate that threat actors have defrauded victims of up to $128 million (about Rs 1,000 crore) via such crypto scams," said Rahul Sasi, Founder and CEO of CloudSEK, as per IANS.

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First, fake domains are created that impersonate legitimate crypto trading platforms.

The sites are designed to replicate the official website's dashboard and user experience.

The attackers then create a female profile on social media to approach the potential victim and establish a friendship, the report stated. The profile influences the victim to invest in cryptocurrency and start trading.

"The profile also shares $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 mentioned.

The victim initially makes a significant profit, which bolsters their trust in the platform and the threat actor.

After the victim seemingly makes a profit, the scammer convinces them to invest a higher amount, promising better returns.

Once the victim adds their own money to the fake exchange, the account gets frozen and the money disappears. When victims take to various platforms to complain about losing access to their accounts, the same, or new threat actors reach out to them in the guise of investigators and take confidential information.

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"To retrieve the frozen assets, they request victims to provide confidential information such as ID cards and bank details, via email. These details are then used to perpetrate other nefarious activities," the report warned.

As investors shift their focus on the cryptocurrency markets, scammers and cheats turn their attention to them as well,' Sasi added.

All this comes barely a week after the GainBitcoin scam began to turn out in trillions. This ponzi scheme, which is turning out to be India's biggest crypto scam yet, is estimated to have collected Bitcoins anywhere between 385,000 to 600,000, thus amounting to around Rs 1 trillion or even more, depending on the prevalent bitcoin price.

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