Authorities in India have apprehended five individuals who are accused of defrauding a businessman of approximately $700,000 through a sham cryptocurrency trading platform.
As reported by local news outlets, the five suspects, including one female, were captured following an inquiry by the cybercrime unit of Odisha’s Crime Branch.
The defendants allegedly operated a con through a fraudulent trading app named ZAIF, promising extraordinary returns of up to 200% on digital currency investments. They falsely marketed the platform as being established in Japan.
It should be noted that ZAIF is a legitimate cryptocurrency exchange based in Japan that suffered a $60 million hack in 2022. Nevertheless, the app involved in this scam appears entirely unrelated and simply borrowed the name to lend itself credibility.
The scheme began when the victim, a businessman in India, was approached on Facebook by a woman claiming to be an IBM software developer based in Hong Kong.
She gained his confidence and persuaded him to invest in cryptocurrency through ZAIF. Over the course of a month, he transferred over INR 6 crore (around $699,352) through various accounts controlled by the fraudsters.
In typical fashion for crypto trading scams, the victim was initially shown fake profits on the platform to instill trust. However, when he attempted to withdraw his earnings, the platform requested an additional INR 89 lakh to access the funds — a tactic commonly known as advance fee fraud.
When the victim refused to comply, the scammers disappeared, severing all communication.
Law enforcement was able to trace the suspects via digital footprints and banking information. During a raid, officials confiscated phones, SIM cards, identification documents, and other evidence connected to the crime.
With cryptocurrencies still operating in a somewhat ambiguous legal space, India continues to be a hotspot for scams preying on unsuspecting users. Earlier this month, police also targeted a similar fraud involving a bogus token called RSN, which promised 2% daily returns, with losses estimated between $1.14 million and $2.29 million.