Crypto Scams in India: 5 Arrested for Fake Exchange ‘ZAIF’ — Read How Scammers Tricked Investors for $700K

Authorities in India have found a crypto trading fraud, arresting five individuals, including a woman, for running a fake crypto exchange named ZAIF. As a Japan-based platform, scammers attract investors with promises of 200% returns on crypto investments. The operation was once exposed when an Indian businessman lost $700,000 to the scheme. This case highlights the developing risks of crypto scams in India and thus increases the need for traders to use an informed approach. With cryptocurrency scams increasing day by day, authorities are boosting investigations to shield investors from such fraudulent schemes.

Fake Crypto Exchange ZAIF & How the Scam Worked

The scam is done by a fake crypto exchange named ZAIF to mimic a legal Japanese exchange that faced a $60 million hack in 2022. The scammers promoted it as a high-return investment platform, promising investors 200% gains. The scheme was clearly structured to appear credible, using fake trading dashboards and manipulated profit figures to build trust. Investors believed they had been engaging in a legal crypto trade, unaware that their money would be drawn by fraudsters.

A woman posing as a Hong Kong-based IBM software program developer targeted an Indian businessman on Facebook and gradually convinced him to invest in crypto through ZAIF. Over a month, the businessman transferred INR 6 crore (~$699,352) across multiple debts managed by the fraudsters. Initially, he noticed fake profits on the platform, encouraging him to make more investments. However, when he tried to withdraw his funds, the scammers demanded an additional INR 89 lakh as an “unlocking fee.” When he refused to pay, they vanished, cutting off all conversation and leaving the victim with huge losses.

Police Crack Down on Crypto Trading Fraud

Authorities in Odisha acted swiftly, launching an investigation via the cybercrime wing of the Crime Branch. Using banking records and digital footprints, they tracked down the five suspects responsible for the scam. During the raid, police seized mobile phones, SIM cards, fake identity cards, & other incriminating materials. Their arrests mark a great step in combating crypto scams in India. Scammers constantly modify their approaches, making it tough for authorities to check such activities entirely.

The case has additionally highlighted the sophistication of crypto fraud. Fraudsters are using advanced techniques to convince suspects, which further consist of fake investment dashboards, social engineering with the help of social media, & professional-looking trading apps. Despite cryptocurrency guidelines operating in a grey area, these scams are happening, making it critical for traders to stay cautious and conduct thorough research before investing.

Why Crypto Scams in India?

The lack of strict policies makes crypto trading fraud a serious problem in India. This case is not the only incident; before this month, authorities got to know about another scam involving the RSN token, which falsely promised 2% daily returns. Estimated losses from the scam ranged between “$1.14 million and $2.29 million.” Experts warned that scammers continue to evolve and try every possible way to convince investors to use their fake crypto exchanges, and lastly, all their invested money will be lost.

Several elements contribute to the rise in crypto scams in India: the fast adoption of digital currencies, lack of investor awareness, and unregulated funding platforms. Many victims fall for the fraud due to the promise of unrealistic returns and no longer realise that real crypto trading consists of huge risks. Until strict regulations are established, such scams will possibly continue, with fraudsters discovering new ways to manipulate investors.