Indian police bust bitcoin fraud ring

Bitcoin's crazy performance this year has attracted many newcomers to the world of cryptocurrencies, most of whom are just looking to make a quick buck without really understanding what they are doing. This naturally attracts criminals with bad intentions, the latest example being a fraudulent trading gang in India.

Local Bitcoin criminal gangs in India

The Special Task Force (STF) in Uttar Pradesh, India, announced that it had recently busted a criminal gang targeting local Bitcoin investors. The alleged criminals used the Localbitcoins service to find their victims, luring investors to send fiat currency with low prices, but never delivering Bitcoin. Indian police said that this criminal gang had slaughtered multiple victims based on the same operating method.

“There are sites where people can trade cryptocurrencies as buyers and sellers. The gang would first lure traders into buying their bitcoins at a low price and sometimes even transfer a portion of it to win their trust,” said superintendent Triveni Singh, head of the STF’s cyber unit.

“After this, the fraudsters transfer the money to their own bank accounts opened under fake identities and when the traders demand a larger amount of Bitcoin, they withdraw the money from the bank accounts and disappear,” added Singh.

While police action in this case protected bitcoin investors, authorities may be making a mistake in assuming this will continue to happen in India, where bitcoin exchanges are facing threats of a government crackdown.

According to trading volumes, demand for Bitcoin is booming in India right now, with people even using it as wedding gifts. If legal online exchanges are being weighed down by onerous regulations or simply not allowed to operate freely, then offline (OTC) exchanges will surely fill the void.

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