Zerodha CEO Nithin Kamath's stark warning for investors: ‘Among all, THIS scam claims most victims…’; How to be safe?

Zerodha's chief executive officer (CEO) Nithin Kamath flagged a grave warning for stock market investors in the era of rising online scams and phishing attempts by third party entities. The head of the leading discount brokerage said in a post that among all investment scams, the one that has claimed the most victims is the ‘WhatsApp investment scam’.

Kamath took to microblogging platform 'X' (formerly Twitter) and provided a step-by-step breakdown of how the WhatsApp investment scam works, so that D-Street investors can notice any suspicious activities on trading and protect themselves from falling for such investment scams online.

How does WhatsApp investment work? Here's a step-by-step guide:

Step 1: You're added to a group with names like "Zerodha Elite Traders" or "Premium Investors Club." The logo, colors, and even SEBI license numbers look legit. The admins pose as me, Nikhil, Venu, or some of our employees.

Step 2: Within hours, the chat is flooded with screenshots of 100–200% intraday returns and testimonials. All of them are fake.

Step 3: They peddle "premium signals" and link to a fake app that looks exactly like Kite. Once you deposit money, the dashboard shows imaginary profits

Step 4: When you try to withdraw the profits, you're told to pay processing fees, taxes, and verification charges. The scammers then take the money and vanish.

Concluding, Kamath also highlighted that Zerodha does not offer stock tips, investment advice, or run WhatsApp/Telegram trading-signal groups. All official communication comes only through our verified channels.

Investment scams on the rise

Over the past few years, investment scams have been on a rise in India. Reports indicated that with 5,087 cases, the overall cybercrimes in India's financial capital Mumbai surged 22 per cent in 2024 compared with 4,169 in 2023. The investment scams skyrocketed nearly 14 times from 80 cases to 1,160.

Investment fraud happens when people try to trick traders into investing money. They might want you to invest money in stocks, bonds, notes, commodities, currency, or even real estate.

A scammer may lie or give fake information about a real investment. Experts advise investors to always receive independent legal advice, or financial advices from a certified advisors or SEBI-registered experts before making investment decisions.

In India, stock market scams have historically exposed regulatory gaps and shaken investor confidence. Among the big ones, the Harshad Mehta scam in 1992 began a revolution of stringent market and regulatory practices. However, vigilance remains the best defence against future scams.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.