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    Crypto crime in India on the rise: A look at major scams in recent years

    Crypto crime in India on the rise: A look at major scams in recent years

    Crypto crime in India on the rise: A look at major scams in recent years
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    By CNBCTV18.com  IST (Updated)


    In 2021, Indians visited fraudulent cryptocurrency websites over 9.6 million times. And then there are crypto hackers and conmen, who have swindled Indians of crores of rupees.

    Despite market fluctuations and an uncertain legal status, cryptocurrencies continue to fascinate Indian investors. The number of crypto users and traders keeps increasing, and worryingly, many seem to be unmindful of the associated risks . These are not limited to market risks; they extend to extreme cyber frauds, involving highly skilled scammers.

    In 2021 alone, Indian users visited crypto scam websites over 9.6 million times. According to Chainalysis, a software platform that tracks the criminal activities linked to cryptocurrency transactions, the most visited scam websites in India are coinpayu.com, adbtc.top, hackertyper.netdualmine.com and coingain.app among others. These five websites alone received about 4.6 million visits from Indian users.

    Besides scam websites, Indian crypto enthusiasts have been duped by conmen and hackers over the years.

    In December last year, the Finance Ministry, in a reply to the Parliament, said at least eight cases of cryptocurrency-related frauds are already under investigation by the ED.

    Here are some of the top cryptocurrency frauds that happened in India:

    Rs 2000-crore GainBitcoin Ponzi scheme scam

    In 2018, Amit Bhardwaj, a businessman, cheated over 8,000 people of a total amount of over Rs 2,000 crore. He orchestrated a multi-level marketing scam and lured investors to give him Bitcoins in exchange for higher returns. He introduced a contract of 18 months offering a 10 percent return. Amit Bhardwaj defaulted on his promise, did not give returns and later fled the country. The Pune Police arrested Amit and seven others associated with him in March 2018.

    The key accused of the GainBitcoin Ponzi scheme recently died of cardiac arrest on January 15.

    Rs 1,200-crore Morris coin fraud 

    The latest of the crypto frauds, the Morris coin fraud, was unearthed in 2022. Over 900 investors were allegedly duped of Rs 1,200 crore by a website offering a fake cryptocurrency called Morris coin. They had invested in the ‘initial offering’ of the fake cryptocurrency.

    The fake crypto was said to be listed on the Coimbatore-based cryptocurrency exchange, named Franc Exchange, as an ‘initial coin offering.’ The investors were lured in with a promise of a daily return of Rs 270 for 300 days which was subject to a minimum deposit of Rs 15,000, which was supposed to be invested in Morris coin. Later it was found that the digital currency was not registered with any exchange, making it impossible to trade.

    In 2020, Nishad, the prime accused, of the Morris coin scam, was arrested by Kerala police. The Enforcement Directorate (ED) later joined the investigation after several complaints were filed at various police stations in Kerala. The ED carried out searches in 11 places including Delhi, Tamil Nadu, Kerala and Karnataka, after it was discovered that three Bengaluru-based companies were behind the entire plot. Nishad was also the director of one of the companies.

    Karnataka Bitcoin scam 2021

    The Central Crime Branch, the specialised investigating agency of Karnataka Police, reportedly seized 31 Bitcoins worth Rs 9 crore from a Bengaluru-based hacker in November 2021.

    The prime suspect of the case is Srikrishna Ramesh, who is accused of hacking websites to get Bitcoins, which he eventually used to procure drugs from the dark web. Ramesh has gone underground after he was released on bail in November last year.

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