India Police Shut Down $2.4 Million Crypto Scam That Duped 2,000 Victims

Police in India have uncovered a large-scale crypto fraud operation that duped over 2,000 victims and led to losses of $2.4 million.

In a late-night operation on Sunday, Assam police said they have arrested three individuals in connection with the scam—Asadul Islam, Hashanur Zaman, and Kobad Ali Mollah—all accused of operating a fraudulent scheme under “RSN crypto.”

The scam targeted residents in Assam and the neighboring state of Meghalaya, luring victims with promises of lucrative returns through a crypto game called RSN, as per an India Today NE report.

Investigators revealed each victim was tricked into investing a minimum of $610 (₹ 50,000), with the total amount misappropriated ranging between $1.2 and $2.4 million (₹ 10-20 crore).

The mastermind behind the operation, Hekmot Ali Sarkar, remains at large, according to authorities, who say they are actively working to apprehend him.

Decrypt has reached out to the Assam Police, but had not received a response at press time.

The fraudsters used online payment platforms such as Paytm and PhonePe to collect funds, which were then converted into the Tether stablecoin, USDT, on crypto exchanges before being transferred to international accounts.

The scam website at the core of the scheme was traced back to China, with technical analysis revealing the site was hosted on Amazon servers.

During the raid, authorities seized several devices, including eight mobile phones, two laptops, and eleven SIM cards, all of which contained vital evidence related to the crypto scam.

It was discovered the fraudsters were renting bank accounts to other criminals nationwide, complicating the police’s operations.

Increased Enforcement in India

This operation is part of a larger crackdown on crypto fraud in India, as the country faces a rising number of Ponzi schemes targeting vulnerable investors.

Late last month, the Indian Central Bureau of Investigation (CBI) conducted raids at multiple locations across the country as part of its investigation into the $800 million (₹6,600 crore) GainBitcoin scam.

In Mumbai, Ravi Mahaseth, managing director of Coin ZX, was recently arrested for allegedly scamming investors out of $23 million (₹200 crore).

Coin ZX reportedly promised high returns on Bitcoin investments, only for payments to stop after a few months, leaving investors at a loss.

India’s Directorate of Enforcement (ED) recently seized approximately $190 million in crypto assets tied to the BitConnect Ponzi scheme, along with a black Lexus SUV and $15,500 in cash.

Despite this recovery, only a small portion of the funds has been recovered, with the total estimated amount of stolen Bitcoin valued at over $31 billion today.

Edited by Stacy Elliott.