Beware of crypto scams flooding online spaces through apps & ads

Bhopal: The next time you are enticed by a mobile-ad on cryptocurrency, online advice from an influencer, a text or even those pop-ups on websites you're scrolling in your free time, think twice, for you too can get caught in the mire of these elaborate scams.
Many people have reported losing their life savings after falling for these ‘investments' that promise high returns, ultimately freezing the victim's account, rendering them incapable of withdrawing their money.
These cyber-cons use the aesthetics of legitimacy and credibility to lure people victims into complicated Ponzi schemes that include crypto-exchanges, online wallets and the allure of quickly multiplying money.
A rising wave of cryptocurrency fraud is sweeping the internet, with numerous mobile and web-based apps duping unsuspecting investors under the guise of high-return crypto investments. These fraudulent platforms mimic legitimate investment schemes while operating as elaborate Ponzi scams. Many such cases are reported to police in the city.
According to police, these apps initially lure users by promising hefty returns through crypto trading. Victims are contacted by sending bulk messages to random numbers. The cyber-criminals utilise WhatsApp or Telegram groups to carry out their scams. Those who fall into the trap are added to specific groups and then guided to download specific mobile apps. Early investors are shown fake profits through manipulated dashboards, encouraging them to reinvest larger amounts and refer others to the platform.
Victims reported that once they attempted to withdraw profits, they had to submit requests. It was up to the fraudsters whether they wanted to return the money or not. Their accounts were frozen or deleted. Many users lost life savings after falling for the scam.
"The modus operandi of apps involved in cryptocurrency investment fraud is textbook Ponzi — early users are paid lucrative returns mostly with money from new investors, not real market returns," said IPS Rahul Kumar Lodha, who played a key role in busting a major cryptocurrency fraud mobile app case during his term as SP in Ratlam. He is presently posted as SP (Rail) in Bhopal.
The case busted by Ratlam police in his tenure is the only case in the country in which police were able to freeze more than Rs 60 lakh in crypto wallets of the accused, which was brought back to the country. The fraud cryptocurrency app operators made the early users their agents, offering commissions to conduct seminars to lure new investors. Investigations in the racket continued for more than a year, and the case has now been included in the case studies in the Police Training Schools.
Police found that Northeast states-based fraudsters, who were in contact with Chinese cyber fraudsters, were behind the fraud mobile app. The money siphoned by the fraudsters from victims in MP and other states in the country was being withdrawn in foreign countries like Singapore and others. Ratlam Police took the help of officials of a crypto exchange located in a foreign country to further investigate the fraud.
IPS Lodha said that the officials of the crypto exchange, which the mobile app operators used, informed him that Ratlam district police was the only police from India to have contacted them about that fraud. The officials informed that apart from them, intelligence agencies from four countries, including Sri Lanka, Canada, Malaysia, and Singapore, had contacted them.
A senior officer said, "What makes these cryptocurrency investment scams particularly dangerous is the illusion of legitimacy they create through professional-looking apps and constant ‘support' communication." The fraudulent platforms often disappear overnight after collecting significant sums. Investigations reveal that most of these apps are operated from outside India, making the recovery of stolen funds and the prosecution of offenders exceedingly difficult. Funds are typically siphoned off through complex layers of cryptocurrency wallets and routed to foreign destinations, leaving behind little trace, cops said.
IPS Lodha said that in the case busted by Ratlam police, more than 250 victims turned up to file complaints, not only from Ratlam but from neighbouring districts. They all were duped by a particular mobile app on the pretext of investment in cryptocurrency offering lucrative returns.
The investors were provided with different QR codes as the identity of their crypto account. A fake crypto wallet was created in their name on the crypto exchange, but the account was being operated by the mobile app operators.
The money siphoned from the victims was transferred into their crypto wallet but was immediately transferred into other wallets. The information shared by the crypto exchange officials revealed that the siphoned money was transferred into more than 10 lakh wallets to create a complex money trail and then siphoned by the fraudsters. The mobile app operators duped thousands of people of crores. Police teams conducted raids in various states and nabbed the accused.
IPS Lodha said that due to police, the money frozen in form of cryptocurrency was transferred into 198 bank accounts opened by Ratlam administration, each account for different cryptocurrency, and then refunded to victims.