Indian law enforcement has apprehended five individuals linked to a scam that defrauded a businessman of approximately $700,000 through a fraudulent cryptocurrency trading platform.
The arrests were made following an investigation by the cybercrime division of Odisha’s Crime Branch, as reported by local sources.
The suspects allegedly operated the scam through a counterfeit trading application named ZAIF, which promised investors exorbitant returns of up to 200% on cryptocurrency investments. This fraudulent platform was falsely claimed to be based in Japan.
It is important to note that while ZAIF is a legitimate Japanese cryptocurrency exchange that suffered a significant hack in 2022, the version used in this scam appears to have no affiliation and merely adopted the name to create a facade of authenticity.
The scam initiated when the victim, a businessman in India, was contacted through social media by an individual posing as a Hong Kong-based IBM software developer.
The scammer gained the victim’s trust, leading him to invest in cryptocurrency on the ZAIF platform. Over the course of a month, the victim transferred more than INR 6 crore (approximately $699,352) into various accounts controlled by the fraudsters.
In a typical maneuver seen in cryptocurrency scams, the victim was initially shown fabricated profits to build his trust. However, when he sought to withdraw his earnings, the platform demanded an additional INR 89 lakh to release the funds, a tactic often referred to as advance fee fraud.
After the victim declined to pay the extra fee, the scammers disappeared, severing all communication.
Authorities utilized digital evidence and banking records to trace the suspects, leading to a raid where they confiscated phones, SIM cards, identification documents, and other incriminating materials.
With the cryptocurrency sector still operating in a regulatory grey area in India, the country has become a focal point for scams targeting unwary users. Earlier this month, police dismantled another fraudulent scheme involving a fake token called RSN, which promised daily returns of 2%. Estimated losses from that scam ranged between $1.14 and $2.29 million.
