Along with cheating during digital transactions, now fraudsters are cheating people by luring them to multiply their money through crypto. Most of the people who become victims of crypto fraud are educated and professionals. There is an international network of crypto fraudsters. Most of the leaders of such networks are living in Chinese cities or Dubai and committing fraud. Telegram or WhatsApp groups are also being used for this. One of the main reasons why Chinese people are getting involved in crypto fraud is the significant decline in the wages of workers there and increasing unemployment. Crypto fraudsters first get investors to open accounts on an app or portal. The small amount invested initially is doubled or tripled. After winning trust, investors are asked to deposit large amounts of money. As soon as investors do this, it is immediately transferred to another account or put on hold. Usually the defrauded amount is sent abroad.
The Finance Ministry has given notice to many guilty crypto exchanges including Binance. The government is also working towards blocking the URLs being used for fraud. According to global blockchain platform ChainAnalysis, India has become the second largest market after the US in terms of cryptocurrency transactions, leaving behind Britain, Turkey, and Russia. Crypto currency exchanges like CoinDCX, CoinSwitch, WazirX, BuyUcoin, Zebpay, Giotas, Unocoin etc. are running in India. Crypto exchanges work like stock exchanges, helping investors buy and sell digital currencies. Registration is necessary for crypto exchanges to operate in India, but only 31 crypto exchanges have registered with the Financial Intelligence Unit. Many exchanges are doing business illegally without registration.
According to a report by crypto currency exchange CoinDCX, about 60 percent of crypto currency investors reside in 10 cities of the country. The five cities with the highest investment in crypto are Delhi, Mumbai, Kolkata, Lucknow and Patna. It is noteworthy that despite the provision of 30 percent income tax on profits, India’s investment volume in crypto during July 2022 to June 2023 has been recorded at about $ 269 billion. Now in India, crimes like cyber crime, digital fraud, terror finance, black marketing and hawala are also being carried out through crypto. The increasing popularity of crypto currency has promoted its use in purchasing illegal things. Crypto currency is a type of digital currency, which is not available in physical form. It cannot be minted in any mint, hence, its transactions are not legal like other currencies. The controller has no control over this. Most of its users transact anonymously. Blockchain technology is used for crypto currency. Encryption (code) is used in crypto currency, using which there is very little possibility of fraud through the system. Crypto currency exists in the form of Bitcoin, Cardano, Ethereum, Ripple, Litecoin, Steem, Dash, Dogecoin etc.
Crypto currency was first used on January 3, 2009, but its popularity started increasing from 2012. Today, the value of crypto currency is increasing rapidly compared to other currencies, such as Euro, Dollar, Pound etc. At the speed at which digitalization is taking place across the world, the spread of crypto currency cannot be stopped. However, there are many countries like India, where most people are unaware of the concept of crypto currency. Still, its acceptance is expected to increase. With the expansion of the crypto currency market, the possibility of regulatory scrutiny has increased. In the changed environment, governments are looking for ways to regulate crypto currencies. New rules and regulations have been made in some countries. The law can bring stability to the crypto currency market and help pave the way for its legalization. Today, along with digitalization, cases of crypto fraud are increasing and in very few cases the defrauded amount is being recovered. Illiterate people easily become victims of online fraud, but the matter of concern is that the number of educated people is more among those cheated through crypto. Today, on the lines of Jamtara, incidents of fraud through crypto are being carried out across the country. To stop this type of fraud, there is a need to run the financial literacy campaign continuously across the country.
(These are the personal views of the author.)