Indian Cryptocurrency Swindlers Arrested for $700k Deception as Fake Japanese Exchange

Indian law enforcement officials have apprehended five individuals, including one female, suspected of swindling a businessman of nearly $700,000 through a fraudulent cryptocurrency trading platform.

According to local reports, the five suspects were apprehended following an inquiry conducted by the cybercrime unit of Odisha's Crime Branch.

The accused allegedly orchestrated the scam using a counterfeit trading application called ZAIF, promising extraordinary returns of up to 200% on digital currency investments. The trading platform was advertised as being headquartered in Japan.

It's important to note that ZAIF is the name of a genuine Japanese cryptocurrency exchange that suffered a $60 million hack in 2022. However, the platform used in this fraud is likely unrelated and merely borrowed the name to establish credibility.

The deception began when the victim, an Indian entrepreneur, was contacted on Facebook by a woman claiming to be a software developer for IBM based in Hong Kong.

She gained his confidence and persuaded him to invest in cryptocurrency through ZAIF. Over the course of a month, he transferred more than INR 6 crore (approximately $699,352) across various accounts controlled by the fraudsters.

As is typical in such crypto trading scams, the victim was initially presented with fake profits on the platform to establish trust. However, when the victim attempted to withdraw the earnings, the platform demanded an additional INR 89 lakh to release the funds — a tactic commonly known as an advance fee fraud.

Once the victim refused, the scammers disappeared, cutting off all communication.

Authorities were able to locate the suspects through digital traces and banking records. During a raid, police confiscated phones, SIM cards, ID documents, and other incriminating evidence.

Given the ambiguous legal status of cryptocurrencies, India continues to be a target for scams and fraud preying on unsuspecting users. Earlier this month, police dismantled a similar scam promoting a fake token called RSN and offering 2% daily returns. Losses were estimated to be between $1.14 and $2.29 million.