Don’t Try This at Home: How One Woman Lost $110k in Series of Bitcoin Scams
An Indian woman from New Delhi has fallen victim to a digital wallet hack. An unidentified individual stole approximately 6.5 bitcoins. At current prices, the theft is worth almost $60,000 USD. That’s bad enough, but wait till you hear what she did next.
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CBI on the Case
According to Indian news site Times of India (TOI), the Central Bureau of Investigation (CBI) has begun investigating the theft of the digital currency. The report indicates that the victim’s digital wallet was “hacked” and fraudsters snaffled 6.5 bitcoins. The victim was then robbed a second time by a man who offered to help retrieve her funds.
The First Mistake
The investigation is being conducted by the CBI’s Economic Offences Wing. For now, the investigation will focus on the stolen bitcoins. The women alleged that there are many other individuals to have suffered and the total theft could amount to up to $7.5 million.
The woman initially invested 0.4 BTC in a company that offered 12 percent monthly returns on investments. The firm appeared legitimate to her, she claimed, as it organized public meetings in five-star hotels. The company gained trust as it began depositing the promised interest monthly into scheme participants’ accounts. The build up of trust led participants to put in more money into the scheme.
The woman told TOI:
“I invested all my savings in the company along with my friends and family members. The company owners assured me returns of 12 percent monthly on my investment.”
Alleged Victim Failed to Look up the Definition of ‘Ponzi Scheme’
In August 2017, the company stopped depositing money, instead offering digital tokens. Predictably, there is little information about the digital tokens that were issued. Unsatisfied, the victim was unhappy and asked the company to refund her invested funds.
During the refund process, the company asked the victim for her email ID and password she registered with the company, as part of the verification process. The woman gave her credentials, and her blockchain wallet was emptied and all email ID data erased from the company’s servers. Exacerbating matters, the victim used the same credentials across all platforms, which the fraudsters took advantage of.
Woman Falls for Yet Another Fraud
The victim then sought the help of an individual who could help her retrieve the stolen bitcoins. The individual hoodwinked her for another $50,000 before cutting ties with the victim. Finally, she sought the help of police to retrieve her stolen bitcoins.
Repeatedly, Indian government officials and the Central Bank of India have cautioned citizens to tread carefully with cryptocurrency. Moreover, the Securities and Exchange Board of India (SEBI) have also shared their concern about the lack of regulations for the crypto space that give rise to Ponzi schemes. Just a month back, the Indian police apprehended an individual operating a fake bitcoin trading platform who had duped many investors.
It is becoming increasingly difficult to sympathize with people who invest in Ponzi schemes, which is exactly what a company offering “12 percent monthly returns on investments” is. All is fine, until they run out of new signups and the money they are actually using to make those returns dries up.
Indian law enforcement may well prosecute the thieves in this case, but the victim’s decision to invest in the scheme was clearly unwise. The absence of cryptocurrency regulations in India is not the problem. Fraud is illegal in that country and another Ponzi scheme prosecution occurred only last month. Stupidity is the only reason this sorry tale made its way into the news.
Should people be held more responsible when exposed to obvious attempts of fraud? Let us know your views in the comments section.
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