It seems that every time a new technology emerges, so too do ne’er-do-wells seeking to exploit that technology for their own gain. Cryptocurrencies are no exception. Bitcoin’s meteoric rise last December led to a whole slew of hacks and scams being perpetrated around the world. Of late, India has been experiencing its own crypto crime wave that shows no signs of abating anytime soon.
Scams, Bamboozles, and Hoodwinks
2018 is going to be one for the record books. In the first half of this year alone, more than $2 billion has been lost to cryptocurrency exchange hacks and scams. India, in particular, seems to be experiencing a spate of crypto-related crimes.
As in most other parts of the world, the increase in popularity of cryptocurrencies in India brings with it no shortage of criminals eager to exploit investors. When cryptocurrencies were first taking off in the Asian subcontinent, scams were mostly limited to phishing links and key-stealing malware. Then came ransomware – malware that encrypts or otherwise locks important files on a user’s system until a ransom is paid – and mining malware.
As prices began to rise, fraudsters got more creative. Fake apps and social media accounts began to emerge, as did multi-level marketing (MLM) ponzi scams like BitConnect. Unscrupulous fraudsters have found easy pickings taking advantage of new investors eager to “strike it rich” with a technology of which they have little to no understanding.
The most infamous crypto scam in India to date was GainBitcoin, founded by Amit Bhardwaj in 2013. Operating as a multi-level marketing company, GainBitcoin promised users an exorbitant 10% monthly return on their investments plus bonuses for every person an investor signed up under them. The scam reportedly defrauded thousands of investors out of an estimated Rs 2,000 crore – $296 million at current rates.
India’s Embattled Relationship with Bitcoin
While countries like Switzerland, Malta, and Belarus have embraced cryptocurrencies with open arms, India remains at loggerheads with the technology. During his budget speech in February 2018, Finance