Indian banker in London loses over ₹1.2 crore to crypto fraud; how to protect yourself from falling prey?

Varun Yadav, a London-based Indian banking professional, was allegedly defrauded by a girl he met online on a matrimonial website recently. 

She used the name Rekha Shah (alias Ankita Shah) and befriended him before she apprised him of a cryptocurrency investment platform known as deuncoin.com, Yadav told MintGenie.

Subsequently, he created a profile on deuncoin.com and invested money into it.

In fact, upon doing some research on the internet, he learnt that he was not alone. There are several others who have fallen prey to the scam in this fashion. 

A similar incident happened with a 37-year-old man in Bengaluru who met a woman named Megha Raghavan on a matrimonial site and eventually lost ₹76.2 lakh, reported Deccan Herald. 

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In a review of Deuncoin.vip, Scamadviser advises investors to be cautious of investing on this platform. 

The review reads as follows: “m.deuncoin.vip has a very low trust score which indicates that there is a strong likelihood the website is a scam. Be very careful when using this website!".

Modus operandi of the crypto scam on Deuncoin:

I.) You are prompted to create an account on the likes of Deuncoin. You invest money to buy crypto tokens. The account shows that you own a certain number of tokens and even small withdrawals are permitted.

II.) Upon seeing the increase in portfolio, the gullible investor might get incentivised to invest more. At this stage, investor is even allowed to withdraw gains.

III.) But soon later, losses start to mount because of the manual manipulation carried out on the platform. Investor gets induced to invest more money to recoup losses. 

“No matter how efficiently you invest, your account would show losses because of the manual manipulation they do on the platform,” says Yadav.

IV.) However, when you want to withdraw a part of your portfolio, the customer care would give lame excuses such as your account witnessed suspicious activity.

V.) The customer care would prompt you to invest a large sum directly from your bank account in order to complete the verification so that the withdrawals can be restored.

VI.) In fact, there is no suspicious activity and urging the investor to invest more money is a ploy to extract an extra pound of flesh. An investor should view this request merely as a ‘red flag’.

VII.) The Deuncoin representative would create a fake sense of urgency to invest more money before the withdrawals are allowed. For instance, investor would be told to invest ₹20 lakh within 24 hours to prevent the account gets completely frozen.

VIII.) Even after investing more money, the company representative would continue to urge the investor to invest more money (as it happened with Varun) in the name of capital gain tax or something else. 

IX.) Under no circumstances, they allow depositors to withdraw any money. In fact, the more you invest, the bigger the scam you become vulnerable to. 

Legal remedies available 

In case this happens to an investor, it is advisable to seek immediate legal help or approach the cyber cell of law enforcement agencies. Let us understand the legal options which one can avail. 

Meghna Mishra, Partner, Karanjawala & Co, says, “In situations where individuals fall victim to an online fraud, such as Ponzi schemes, exploring legal avenues is often recommended. It is advisable for the affected party to consider filing a fraud case against the wrongdoers. The collection of substantial evidence, including communication records and transaction details, can significantly strengthen the case.”

“Additionally, reporting the incident to law enforcement agencies and submitting a complaint to relevant financial regulatory bodies can prove beneficial,” she adds.

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Mumtaz Bhalla, Partner, Economic Laws Practice, says that the easiest option for the victim of a Ponzi scam is to file a complaint on the Reserve Bank of India’s website viz. SACHET which can curb the issue in its initial stage. 

“Defrauded can also file a police complaint of cheating and criminal breach of trust. On the civil side, the victim can file a suit for recovery and/or a consumer complaint for deficiency in service/unfair trade practice. Victims can also complain to the regulators,” says Bhalla. 

She also mentions that there are ways to even get investigation by SFIO (serious fraud investigation office) which not all victims can achieve.