As cryptos gain ground in India and Bitcoin price spikes, Indian scammers are likely to make the most of the opportunity.
India is the hub for call center scams. Call it a lack of strict regulatory measures to stop such activities or the scammers’ resilience to start over every time their business is busted, but call center scams have only grown more prevalent in the country.
With cryptocurrencies slowly gaining ground in the subcontinent, groups of scammers are also taking advantage of Indians’ increased interest in digital assets.
The founder and CEO of a blockchain and cryptocurrency research company Crebaco, Sidharth Sogani, told Cointelegraph that so far, multi-level marketing schemes and “fixed return” crypto investment schemes are the most common.
Sogani said that new and inexperienced cryptocurrency users often choose to overlook the technicalities of these investment schemes and put in their funds right away in order to make a quick buck.
Individuals operating these scams also target rich people with black money who cannot deposit their funds in bank accounts or invest in other assets.
Upon receiving the funds, the scam operators launder the money in other countries, Sogani stated.
Between 2017 and 2019, Indian investors have lost almost $500 million to scams operated within India and abroad.
Cointelegraph also reported that scammers are targeting rich Indian businessmen to steal huge sums of money in one fell swoop. Two such businessmen lost $50,000 and $3 million to crypto scams.
Sogani stressed that it was crucial for Indian regulators to step into the crypto space and create laws that can safeguard crypto users from scams. As cryptocurrency prices start to rise again, there will be more scams as people invest due to a fear of missing out. He said banning cryptos will not solve the problem as people will still continue to invest directly in cash:
“I believe a compliance framework is necessary for all crypto projects willing to operate in India. Once that is done, things will improve. Users will learn about crypto and awareness will rise only when the government tells them that this ecosystem is regulated.”