Probe into $2,600 Indian job fraud reveals $390M Binance-linked digital asset scam

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Law enforcement authorities in India have accidentally unearthed one of the largest digital asset scams in the country. Police were probing a small job scam but stumbled upon links to another scam, and after investigations, they found that about $390 million had sunk into the massive scam, which had ties to China and the Philippines.

According to CNBCTV18, authorities in the northern province of Uttar Pradesh were investigating scammers who posed as online jobs companies. They would urge innocent Indians to send some rupees and either get connected to high-paying jobs or receive lucrative returns on investment.

One woman who was defrauded by the scammers reported to the police, who, after investigation, arrested a man from the city of Bareilly on charges of orchestrating the fraud.

Further investigations revealed that the scammer had transferred the funds to three other accounts, and upon following up, police said they discovered the crime ring was much bigger than they had thought. The scammers reportedly used the money they scammed to buy digital currencies on Binance, OKCoin, and other local exchanges.

“So far, investigations have revealed that 256 wallets of different cryptocurrencies have been used to transfer Rs 1,413 crore, including six wallets in India, while other wallets were created in China, Malaysia and the Philippines. Besides, the bank accounts of as many as 46 companies, trusts and firms have been used to transfer over Rs 1,500 crore. Twelve of these are shell companies,” Triveni Singh, superintendent of police (SP), cybercrime in Uttar Pradesh, explained.

Digital currency experts told the outlet that while public blockchain transactions are easy to trace, the use of dark coins like Monero and the cross-border nature of most digital currency wallets makes them harder to trace.

“…many savvy criminals now use Monero – these are called privacy coins. If used, it becomes next to impossible to track it down. The moment something enters a Monero address, it is gone,” Rohas Nagpal, the chief blockchain architect at Hybrid Finance Blockchain, commented.

Cybercrime and privacy lawyer Prashant Mali concurred, adding that arresting the criminals may be possible, but it’s unlikely the victims will ever have their money back.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.