This is how it unfolded: He met a woman on Facebook who claimed to work for a crypto trading platform, CoinEx. She convinced him to invest in cryptos to earn a 10% return. Initially, she transferred ₹9,900 to win his trust. Later, in multiple transactions, he transferred ₹31 lakh into various bank accounts shared by the woman.
But when he tried to withdraw the money, he was told to invest more. He later discovered that the website he was using was a clone of the CoinEx platform. This is quite an unusual occurrence, but to avoid this from happening to you or someone you know, you may follow these smart tips:
Lessons one can learn from this crypto fraud
I. Genuineness Vs Duplicate: It is not wrong to trade in cryptos or any currency for that matter. However, it is crucial to use a genuine platform instead of a duplicate version. You can check the reviews and downloads on the Android or Apple Store to get an idea of its authenticity.
II. Reviews from friends or strangers: Getting a review from someone you know is very different from a stranger telling you something on social media. Therefore, if you take an investment decision based on a stranger’s review, then you are prone to fraud and scams.
III. Too good to be true: Always make sure to cross-verify the claim made by the agent by checking the original source. For instance, if someone claims to offer a 10% return by investing in a particular asset, then you should cross-verify the claim with the existing asset prices.
This should reconcile with reality. If there is too much disparity between the two, then you certainly have a reason to be suspicious.
In the above-mentioned case, the fraudster woman promised the victim a 10% assured return, whereas no asset can guarantee such a return. The businessman could have been careful when he was promised such “assured” returns.
IV. Realistic gain vs greed: Most fraudsters manage to dupe those investors who prioritise greed over realism. When the financial markets are volatile and asset prices are on a fall, it is unlikely to earn a high return.
So, one must come to terms with reality and wait for the bull run to resume. Instead, if you are greedy and want to earn high returns regardless of market direction, you become vulnerable to such traps promising “high returns”.
V. No to honey traps: Often, these fraudsters tend to trap wealthy men, where women lure them on social media such as Facebook and Instagram. First, they befriend them and then convince them to invest money. Such patterns are easy to identify, and one should be cautious of them.
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