Crypto scam sites continue to draw Indians in droves

Over the last two years, Indian users have visited many websites running crypto scams millions of times, according to data sourced from blockchain tracking firm Chainalysis Pte Ltd.

Indians visited crypto scam websites more than 17.8 million times in 2020. The figure fell sharply in 2021, but it was still substantial at 9.6 million times. Chainalysis’ data names coinpayu.com, adbtc.top, hackertyper.net, dualmine.com, and coingain.app as the five-most visited scamming websites by Indians over the past year. These sites alone received 4.6 million visits from India last year.

Scams around cryptocurrencies have often been cited as a cause for concern by regulators and politicians in the country. Earlier this month, the Enforcement Directorate attached assets worth ₹36.72 crore in an alleged scam where investors in Kerala were duped with offers to invest in a fake cryptocurrency called Morris Coin.

View Full Image

Crypto scams include phishing websites designed to steal sensitive information from users, as well as ponzi schemes and fake investment plans like Morris Coin. The Kerala case isn’t an isolated one—another scam in Karnataka has been under investigation for over a year now.

Some crypto scams are also disseminated on messaging apps like WhatsApp and Telegram.

“In a few cases, we have seen employees of cryptocurrency exchanges sharing databases of cryptocurrency owners with cybercriminals, who use this information to start cyberattacks using SMS or even WhatsApp messages with phishing links to takeover crypto accounts,” said Rahul Tyagi, co-founder, Safe Security (formerly Lucideus), a home-grown cybersecurity firm.

In fact, cybersecurity and crypto experts have been flagging an increase in cryptocurrency-related frauds and scams since 2020, the year which marked the start of growth in India’s crypto industry.

Cybersecurity firm Kaspersky had predicted a rise in thefts of Bitcoin back in December 2020, and Chainalysis’ report on global crypto crimes from December 2021 showed that the value of cryptocurrencies held in illicit wallet addresses worldwide soared 79% last year to $14 billion from $7.8 billion in 2020.

Last November, Reserve Bank of India governor Shaktikanta Das said the “possibility of digital frauds” was among key concerns in launching a central bank digital currency (CBDC). While CBDCs aren’t the same as cryptocurrencies, both are based on blockchain technologies.

To be sure, the crypto industry in India has begun educating users about cryptocurrencies. Industry body Internet and Mobile Association of India (IAMAI) formed the Blockchain and Crypto Assets Council (BACC) in 2021 with an aim to grow awareness about crypto and run advocacy operations.

Crypto unicorns like CoinSwitch Kuber and CoinDCX, too, have put in resources towards the cause. CoinSwitch announced a “Riskometer” on its platform last month, which warns users while investing in highly-volatile currencies.