Law enforcement authorities in India have successfully apprehended five suspects involved in a sophisticated cryptocurrency scam that swindled a businessman out of approximately $700,000. The suspects, including one female accomplice, were arrested following a thorough investigation conducted by the cybercrime wing of Odisha’s Crime Branch.
The fraudulent scheme operated through a fake cryptocurrency trading platform named ZAIF, where the perpetrators lured victims with promises of extraordinary returns of up to 200% on their digital currency investments. The platform was deceptively advertised as being based in Japan, leveraging the credibility of a legitimate Japanese cryptocurrency exchange also named ZAIF, which was previously targeted in a $60 million hack in 2022.
The scam commenced when the victim, a businessman from India, was contacted on Facebook by a woman posing as an IBM software developer based in Hong Kong. Through a series of convincing interactions, the victim was persuaded to invest in cryptocurrencies via the fraudulent ZAIF platform. Over the course of a month, the victim transferred more than INR 6 crore (approximately $699,352) to various accounts controlled by the scammers.
In a typical fashion observed in such cryptocurrency trading scams, the victim was initially provided with fabricated profits on the platform to establish credibility. However, when the victim requested to withdraw the purported gains, the scammers demanded an additional INR 89 lakh as an advance fee to unlock the funds, a tactic commonly known as advance fee fraud. Upon the victim’s refusal to comply with the demand, the scammers ceased all communication, leaving the victim in financial distress.
Law enforcement officials were able to trace the suspects through digital footprints and banking records, leading to a successful raid where phones, SIM cards, identification documents, and other crucial evidence were seized. With the cryptocurrency landscape still operating within a regulatory grey area in India, the country remains susceptible to various scams and fraudulent activities targeting unsuspecting individuals.
In a recent incident earlier this month, authorities intervened in a similar scam involving a fake token called RSN, promising daily returns of 2%. The losses incurred in this particular scam were estimated to be between $1.14 and $2.29 million. These occurrences underscore the importance of exercising caution and due diligence when engaging in cryptocurrency investments, as scammers continue to exploit the vulnerabilities within the digital asset space.