Gullible Users, Lack of Regulation Boost Crypto Cybercrime in India

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NEW DELHI: Last week India’s Law Enforcement Branch carried out several raids as part of an investigation into a massive crypto scam involving a fake cryptocurrency called Morris Coin that was launched to trick millions of people. investors in Kerala, Tamil Nadu and Karnataka over 1,200 crore.

Prime Minister Narendra Modi’s official Twitter account was “briefly compromised” last month and a message was released stating that India has accepted crypto as legal tender.

The massive increase in the value of cryptos after the pandemic and the availability of multiple wallets and exchanges have spurred a wave of massive investment in cryptos. The value of some of these newer cryptos, like Dogecoin, soared 8,300% last year, even surpassing that of bitcoin. And even if bitcoin prices collapse again, the appeal of cryptocurrencies remains. While it’s still not clear how many people in India own crypto, some of the big crypto exchanges such as CoinSwitch Kuber claim to have over 15 million users.

That said, with more and more people in India trading all kinds of crypto, hackers are having a blast. According to blockchain analytics firm Chainalysis, the total value of cryptocurrencies held by illicit wallet addresses around the world soared 79% last year to $ 14 billion from $ 7.8 billion in 2020. Crypto investors lost over $ 2.8 billion globally to various crypto scams in 2021. Illicit address refers to wallets used for cyber attacks, Ponzi schemes, and other scams.

Stealing cryptos from wallets through phishing or tricking people into spending on unknown or fake cryptos such as the Morris coin are some of the ways that crypto owners and investors have recently been targeted by scammers and hackers. .

In many cases, cybercriminals use channels like Whatsapp and Telegram to scam young crypto owners with the promise of doubling their money. “In a few instances, we’ve seen cryptocurrency exchange employees share databases of cryptocurrency owners with cybercriminals, who use this information to launch cyber attacks using SMS or even messages. WhatsApp with phishing links to take control of crypto accounts, “said Rahul Tyagi, co-founder. , Safe Security (formerly Lucideus), a cybersecurity company.

Despite the increase in crypto investments, actual knowledge about cryptocurrencies or their underlying technologies is low in India, as is cybersecurity awareness. “Users need to understand that unlike traditional fintech, where a formalized repair system exists in the event of fraud; for cryptocurrencies, if you lose control of your wallet or send cryptocurrency to an unwanted address, there is no way to revive it, ”he said.

According to NS Nappinai, Supreme Court attorney and founder of cybersecurity organization Cyber ​​Saathi Foundation, while attacks on cryptocurrency owners began a few years ago and escalated during the pandemic, Crypto scams have been going on for many years. “Now both are flourishing,” she said. “People don’t know about blockchain or cryptocurrency. They are easily in love and fall for these scams,” she added.

For their part, wallets and crypto exchanges have tried to educate users about security. Many offer features that can also minimize risk. Tyagi pointed out that most users are unaware that crypto wallets have an option called whitelisting crypto account addresses. If activated, it reduces the risk of fraud. This is a sign-up feature that allows withdrawals to be made only to addresses that you have previously designated. “Users should explore and understand the security and privacy aspects of cryptocurrencies before investing,” he added.

Some experts also believe that the lack of crypto regulations in India has increased the risk, as many users are unsure which coins are legitimate and which are not. Nappinai believes that regulation “at a very basic level” will ensure that there is clarity in terms of what is allowed and what is criminal. “So that, from the investor’s point of view, it is preventive and protective. it gives them the clarity to continue. “

India has changed its stance on cryptos and, instead of a blanket ban, is now seeking to regulate it, recent reports show. The government had listed the Cryptocurrency and Official Digital Currency Regulation Bill 2021 during Parliament’s winter session last month, but it was not tabled.

While crooks and cybercriminals can still be prosecuted under existing laws, the regulations will encourage investors to file complaints and ensure that no one can issue new coins out of the blue and start collecting money. money from initial coin offerings. Nappinai pointed out that before a Supreme Court ruling on an Internet and Mobile Association of India (IAMAI) appeal in 2020, people were too scared to even file a crypto crime complaint.

“The government should take a call to say yes or no to crypto,” Nappinai said. “If you’re going to say maybe or yes to certain things, then be specific in terms of what you’re going to allow. What will be the parameters needed to release a private room or what investor protections are in place,” a- she declared.

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