BENGALURU: With cybercrimes on the rise, police investigating these cases have identified a new trend in investment frauds where stolen funds are converted into cryptocurrency to evade detection. While layered money transfers are a common practice in cybercrimes, fraudsters are increasingly using digital currencies such as crypto, which are much harder for authorities and bank officials to trace. Once the money is converted into cryptocurrency, it is transferred across numerous accounts and wallets, often internationally, making it extremely difficult to track and recover.
Till July 2023, only 26 investment fraud cases had been reported, resulting in losses of Rs 1.69 crore. However, this year till July, an alarming surge, with 143 cases leading to a staggering loss of Rs 42.35 crore was witnessed.
One such recent case was reported in Bengaluru Rural CEN police station involving a 33-year-old man who has been working as an insurance agent and stock market investor for over 10 years. To make the investment, the victim borrowed money from relatives and sold his property, expecting a 500% return, only to be swindled out of everything. The victim lost more than Rs 1.2 crore to the insurance or investment fraud.
The scam started with a WhatsApp message containing an ‘app link’ and continued for 46 days. During this time, the victim invested Rs 1.2 crore, lured by the false promise of receiving more than Rs 60 crore, as indicated in the app’s wallet balance. After making continuous investments, the victim attempted to withdraw the money from the wallet, but the application failed to respond and all access to the link and the app was promptly shut down.
When filing the complaint, the victim told the police that he was well-versed with various cyber frauds, however, he was deceived by the sophistication of the scheme.
CK Baba, Superintendent of Police for Bengaluru Rural District, said that fake investment scams promise unusually high returns in a short period. He noted that legitimate investments are typically steady and yield returns over the long term. The senior officer explained that investment frauds unfold over a longer period and the extended time frame allows fraudsters to employ various tactics, which delays reporting and prevents victims from realising the scam, as they often refrain from withdrawing their funds while hoping for greater returns.
SP Baba warned that apps not available on official platforms like the Play Store or App Store should be viewed with suspicion. Moreover, users should be cautious when an app requests permissions that are unrelated to its core features. “In the case of investments, if an app requests access to photos or contacts, there is a risk that, with AI and other technologies, this information could be misused for other purposes,” he mentioned.
Further, he highlighted the challenges of tracing such apps due to their lack of legitimate registration. “Investment frauds are one of the worst things happening on the digital landscape. If an investment sounds too good to be true, it’s likely a trap. Stay vigilant, verify sources, and protect your hard-earned money from fraudsters lurking behind WhatsApp links and false promises,” he added.