Digital assets investors in India lose thousands of dollars in new scam

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Police in Thane have apprehended one person for allegedly scamming nearly 1,500 investors of their hard-earned cash in an investment scheme. Ritesh Panchal, operating under the alias Ritesh Sikalgir is said to be the scheme’s mastermind, offering false returns on digital asset investments.

Victims of the scheme believed that the suspect would double their investments within 12 months from his Magic 3x racket but were disappointed when their funds disappeared. Law enforcement acted upon a complaint filed by 24 investors who collectively lost around $10,000, according to local media reports.

Preliminary investigations showed that Panchal operated with multiple aliases, including Magic 3x and SMP, to lure in new investors. Panchal’s operations used accounts in four different Mumbai banks that he utilized to store the proceeds of his criminal enterprise. Properties belonging to him in affluent areas of Mumbai have been discovered as the police track down his accomplices.

Panchal will be prosecuted under section 3 of the Maharashtra Protection of Interest of Depositors (MPID) Act and the Indian Penal Code, particularly sections 406, 409, and 420 dealing with the offenses of criminal breach of trust by agents and cheating.

The falling spate of crime in the ecosystem

Crime in the digital asset ecosystem spiked with the rise in prices, with bad actors netting billions in scams and hacks. However, a Glassnode report noted declining asset values in the second quarter led to falling crime activity.

The chilling crypto winter meant new and susceptible investors to scams stayed away from the market as the returns offered were not enough to lure them in. The remaining participants in the space also remained reluctant to join new initiatives, choosing to hold onto their assets until a price rally occurs.

The report noted that while romance and investment scams have waned, hackers are having a field day in the space. There have been multiple reports of hacks of top digital assets protocols like Solana-based Slope wallet that cost users millions of dollars in losses.

Bridges linking blockchain networks were the biggest targets of cybercriminals, losing $1.4 billion since the start of the year. Ronin, a bridge supporting Axie Infinity, lost a staggering $615 million in a record-breaking heist. Wormhole lost $320 million worth of digital assets while Harmony’s Horizon bridge fell victim to another tragic security breach.

Tom Robinson, the co-founder of Elliptic, noted that “blockchain bridges have become low hanging fruit for cybercriminals” given the large amounts of virtual currencies locked in them.

Watch: The BSV Global Blockchain Convention presentation, Sentinel Node: Blockchain Tools to Improve Cybersecurity