A fresh study published earlier this week asserts that fake cryptocurrency exchanges have tricked Indian investors out of more than $128 million (almost Rs 1,000 crore) as the global cryptocurrency market plummets.
The report released by CloudSEK, a cyber-security company, throws light on an ongoing operation involving many phishing domains and Android-based fraudulent crypto applications.
The report also claims that this massive operation lures unsuspecting investors with limited domain-related knowledge into a massive gambling scam.
The report also noted that several of these fraudulent websites imitate "CoinEgg," a legitimate UK-based cryptocurrency trading platform.
The workings of these scams were broken down into the following steps by the report.
First, threat actors construct phony websites impersonating actual cryptocurrency trading platforms.
The webpages are designed to emulate the dashboard and user experience of the official website.
The attackers then build a female social media profile in order to initiate contact with the possible victim and establish a friendship.
The profile influences the victim to begin trading and investing in cryptocurrencies.
The victim immediately realises a substantial benefit, which increases their confidence in the platform and threat actor.
After the victim appears to have made a profit, the con artist gets them to spend more money by promising greater profits.
Once the victim deposits their own funds into the bogus exchange, the threat actor freezes their account, preventing them from withdrawing their investment, and then vanishes with their funds.
When victims use multiple venues to complain about losing account access, the same or new threat actors pose as investigators to contact them.
To reclaim the frozen assets, they request via email that victims give sensitive information such as identification cards and bank account information.
The report cautioned that these details are then used to perpetrate other criminal actions.
Reports like this highlight the need for regulation in the cryptocurrency markets in India.
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