In the intricate world of cryptocurrencies, where fortunes are made and lost in the blink of an eye, scammers and fraudsters never leave a chance to deceive innocent people. We’ll be discussing one such heinous event that took place quite some time back when a person lost his valuable earnings in the avidity of earning unimaginable amounts in a short time.

A few days back, a person (let’s call him Mr. A) was approached by scammers via messaging platforms like WhatsApp and Telegram, where he was lured by the promise of substantial profits and a high amount of returns on investment.

These scammers were highly proficient at their fraud game. They shared a link to a seemingly authentic third-party app (let’s call it ABC) that was easily available on the Play Store, and here’s the catch – the logo of the app was quite recognizable as it was of a popular Indian crypto exchange (let’s call it XYZ). Until this time, Mr. A didn’t know he would be just another victim of the fraud.

The modus operandi of the ABC app was kind of insidious. It used to showcase random Unified Payments Interface (UPI) IDs; each UPI ID flashed was a beacon of opportunity for the fraudsters. Blinded by the hope of multiplying his investments, Mr. A took the bait and made payments on one of the UPI IDs that looked legitimate.

To his dismay, the UPI ID turned out to be that of an unsuspecting XYZ user. Although, the XYZ user had no involvement in the digital facade that was unfolding.

Coming back to Mr. A; so he was getting deeper into the trap. Let’s see how?

The ABC app promised Mr. A a substantial amount of USDT (Tether, a popular crypto). However, when he attempted to withdraw his promised gains, he was met with an unexpected twist – the app had vanished from the PlayStore without a trace, leaving him empty-handed and disillusioned.

Without a second thought, Mr. A filed a complaint, and the investigation started immediately. Shockingly, the UPI ID that Mr. A had interacted with led to the popular crypto exchange XYZ, the user who was genuine and innocent. The user was equally confused about the turn of events.

Note: When Mr. A was making payment to the flashed UPI ID on the third-party app, at the same time, the XYZ user (having the same UPI ID) did a transaction (precisely P2P transaction) on some other crypto exchange and not the ABC app.

The untangling of the scam exposed the level to which these scammers can go to deceive innocent people.

During the investigation, as the crypto exchange, XYZ cooperated with the officials, it was found that – in a legitimate P2P transaction, a buy and a sale must occur for the same amount. However, in this scenario, the scammers did not fulfill their end of the bargain and were successful in their aim. While Mr. A transferred funds to make a purchase, the crypto exchange user refrained from selling any asset for which the payment was made. On the other hand, the scammers placed a buy order using the exact amount Mr. A had transferred.

The outcome was stark. Mr. A found himself in possession of neither the promised USDT nor the asset he had aimed to procure. This scam showcased the height to which fraudsters would go to deceive innocent people.

Bottomline Thought

This scam story is just a reminder to everyone that the world of crypto while brimming with good opportunities, is also filled with risks. As more people are becoming a part of this digital asset, it is crucial to exercise caution, perform thorough research, and always be skeptical of promises that appear too good to be true.

Key Takeaway

• Crypto exchanges do not provide any guarantees of returns.
• The risk associated with trading falls squarely on the shoulders of the user. Users must conduct thorough research (DYOR) before trading on exchanges.
• Relying solely on the allure of high promised returns is not sufficient; users must comprehensively assess the inherent risks and verify the authenticity of the platform or application being used.
• Furthermore, it’s vital to recognize that exchanges do not initiate personal outreach to users via third-party communication channels. From the initial sign-up to the final trade, the user retains complete responsibility for making decisions and executing transactions.
• It is important to understand that exchanges function as service platforms and not as guarantors of returns.
• Users often fall victim to unsolicited messages on platforms like WhatsApp and Telegram, which redirect them to third-party apps or websites with no affiliation or connection to the legitimate exchange. Such unfortunate incidents often lead victims to seek recourse from the exchange after falling prey to scams.
• However, it’s essential to comprehend that exchanges can only address grievances pertaining to their own services and cannot offer resolutions for issues involving scammers and third-party services.
• Conducting thorough research and due diligence (DYOR) should be an essential prelude to trading, not an afterthought prompted by falling victim to scams masquerading as high-return opportunities.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.