A doctor living in the state of Maharashtra was defrauded by crypto fraudsters under the pretext of transferring more than $35,000 through a method called “medicine pack scam”. This incident raises concerns about how cryptocurrencies can be misused by fraudsters and shows how common such crimes have become.

The incident began when the doctor received a phone call stating that a package allegedly sent to Thailand contained “MD drugs”, three passports and three SIM cards. Using this information, scammers force the victim to act in fear and panic.

According to the statements made by the police, the fraud took place between August 2 and 6. The fraudsters directed the victim to download a mobile app to buy cryptocurrency and enabled him to purchase approximately $36,763 in cryptocurrency worth INR 30,86,535.

In such fraudulent operations, perpetrators often deceive victims by posing as a legitimate official, such as the police, cargo company, or government agency. These people use scare tactics to create an emergency and offer the victim to pay with cryptocurrency. Once victims pay, scammers lose track of the money and often transfer the funds to multiple bank accounts, making them harder to trace.

India has experienced a rise in such scams in recent years. A cybercrime investigation launched in Pune in December 2023 revealed that more than 12 people lost more than $480,000 through similar fraudulent methods.

The investigation showed that the fraudsters used the funds obtained through a series of bank accounts to buy and transfer cryptocurrencies outside India to China, Dubai and Taiwan. These types of scams are often complicated by the transfer of funds to various accounts, making the job of law enforcement more difficult.

To prevent cryptocurrency-related fraud, India has tightened regulations on cryptocurrency exchanges. India’s Financial Intelligence Unit (FIU) has made it mandatory for cryptocurrency exchanges to be registered with the regulator.

Platforms that are not registered with FIU are blocked. Additionally, India’s Enforcement Directorate has been carrying out stringent inspections, targeting many fake investment schemes that are defrauding investors using cryptocurrency hype. However, despite these regulations, crypto crimes are rapidly increasing in India.

The fact that even those charged with upholding the law are involved in such scams indicates that the current legal framework cannot punish such crimes effectively enough and that a specific regulatory framework against cryptocurrency crimes is lacking.

These offenses are prosecuted under existing laws, creating an additional challenge for regulators and prohibitors.