- Current rally of cryptocurrency is spreading so fast that one may cringe at the possibility of a scam revealed at any point of time
- This is the reason which prevents a huge section of the society from considering this mode of investment as they have a limited risk appetite
- However, what happens when this fear comes true?
One would expect strong laws and due diligence in place so that such a mishap does not happen and the interests of the users and the general public are secured. Unfortunately, most of the rules come when a lesson is learned by an unfortunate sample of victims. Though there are warning signs that can prevent any unforeseen situation, strong laws will avoid any system leaks. One such instance is recently by the Indian government, which passed a class-action lawsuit against a cryptocurrency scam duping multiple investors. The scam promoted in 3 languages promised to offer a return of 900% on the investment made.
How was the Scam Duping Investors?
Various scams are getting unearthed, and those conducting them are coming up with unique ways to beat the authorities and make it appear a genuine transaction. In this case, the investors were trapped by a firm named IQ Option:
The platform chain permitted users to trade in stocks, forex, options and cryptocurrencies. 26 types of cryptocurrencies were listed on the platform including Bitcoins (BTC), Ether (ETH), Stellar (XLM), and Bitcoins Cash (BCH), which made the entire system appear genuine.
It also claimed to offer complex financial products such as Contracts for Difference (CFD) and other derivative products.
The platform has over 48 million registered users from 189 countries, including India. It also made use of 3 Indian languages like English, Hindi, and Bangala to target the core Indian audience.
It lured investors by offering a mouth-watering 900% with an initial investment of $1 for participation.
However, post this imposed a hidden fee of 2% for every withdrawal. Despite making payments, customers could not execute their withdrawals, and their credentials were asked to be entered. Post this would display a series of error messages and rob the crucial details.
Steps Taken by the Government
The authorities have immediately swung into action and have bought in the following changes:
The lawsuit seeks a protection order against fraudsters and blocks all websites and apps used in this scam in the country. It further prevents the defendants from operating a future business in India
A notice has also been issued via media seeking the victims to come forward so that a detailed investigation and forensic audit can be conducted for quicker resolution
Unfortunately, the scam cannot be controlled but strong regulations and individual awareness will ensure that such scams can be eliminated from the system. Technology plays a critical role since its misuse can backfire on innocent users. Thus, a combination of these resources and vigilance can drastically reduce these instances in the future.
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