In a chilling reminder of the dark side of the digital finance boom, two engineers from Cuttack, Odisha, recently fell victim to a crypto investment scam and lost a staggering ₹43 lakh (approximately $52,054). The incident not only highlights the rising menace of cryptocurrency frauds in India but also underscores the urgent need for awareness, vigilance, and regulation in the crypto space.
This article delves deep into the scam’s details, its broader implications for India’s crypto ecosystem, and what investors should do to stay protected.
How the Cuttack Crypto Scam Unfolded
The two engineers, residing in the Purighat and CDA areas of Cuttack, were lured into a deceptive crypto investment scheme through WhatsApp messages — a method increasingly used by cybercriminals in recent years.
Phase 1: Building Trust through Task-Based Payments
Initially, the victims were added to a WhatsApp group where they were offered simple tasks with the promise of attractive payouts. Upon completion of these tasks, they received instant payments — a classic strategy scammers use to establish credibility and lure victims into a false sense of security.
Phase 2: The Investment Trap
Once trust was established, the group administrators claimed the engineers could earn 30% profits on crypto investments. However, to be eligible, they had to make an initial investment. Driven by the prospects of high returns, the two individuals invested ₹20 lakh and ₹23 lakh respectively into what turned out to be a fraudulent website.
The result? Both lost their life savings in a matter of days. When they realized they were being scammed, the fraudsters had already disappeared, leaving them with no way to recover their funds.
Police Investigation Underway
The victims have reported the incident to the cybercrime department, and an investigation is currently ongoing. Authorities are exploring digital trails and IP addresses to identify the perpetrators behind the scam.
Also Read: CoinFund President Slams BIS Crypto Containment Strategy as “Dangerous”
Why Crypto Scams Are on the Rise in India
India has witnessed a meteoric rise in crypto adoption, especially among young professionals and tech-savvy individuals. However, with rapid adoption and minimal regulatory oversight, scams have surged.
1. Lack of Awareness
Many new investors lack the technical knowledge and financial literacy to distinguish between legitimate and fake platforms.
2. Shift to Foreign Exchanges and P2P Platforms
Due to the Indian government’s strict tax policies on crypto — including 30% tax on gains and 1% TDS on every transaction — many traders have migrated to less-regulated international platforms, increasing exposure to fraudulent schemes.
3. Use of Popular Messaging Apps
Scammers are using platforms like WhatsApp, Telegram, and Facebook to target unsuspecting users with fake offers, job tasks, and investment schemes.
Success Story: Mira-Bhayander Police Recover ₹33 Lakh from Chinese E-Wallet
Amid the grim news, there was a silver lining from Mumbai’s Mira Road area, where cybercrime officials successfully recovered ₹33 lakh from an e-wallet operated by a Chinese national. The recovery was possible after over a year of investigation and coordination with a Seychelles-based cryptocurrency exchange.
This rare success shows that crypto crimes can be cracked — but it takes time, effort, and international cooperation.
Read Also; CoinFund President Slams BIS Crypto Containment Strategy as “Dangerous”
The State of Cryptocurrency in India: A Sector in Limbo
Trading Volume Has Plummeted
Indian exchanges like WazirX, CoinDCX, and ZebPay have seen daily trading volumes shrink by over 90% since the tax policies came into effect.
Brain Drain and Capital Flight
Many Indian crypto startups and developers have moved operations to crypto-friendly nations like Singapore, Dubai, and the US.
Increase in Unregulated Activity
As users flee to foreign exchanges and P2P networks, the absence of regulation makes it easier for scammers to thrive.
What Investors Can Learn from This Incident
To avoid becoming the next victim, here are some key precautions crypto investors in India (and globally) must take:
1. Never Trust Unsolicited Offers
Whether it’s a WhatsApp message or a random email, do not trust strangers promising guaranteed returns — especially in volatile markets like crypto.
2. Research Before You Invest
Always verify the legitimacy of the platform you’re using. Check for:
- Website security (HTTPS)
- Team background
- Online reviews
- Regulatory licenses
3. Avoid Task-Based Investment Schemes
Many scams begin with small payouts to earn your trust. If a platform asks you to invest more money to “unlock” returns, it’s a red flag.
4. Use Trusted, Regulated Exchanges
Stick to known, KYC-compliant exchanges even if the taxes are high. It’s better to earn slightly less than to lose everything.
5. Report Suspicious Activity Immediately
If you suspect you’re being scammed, contact your local cybercrime unit right away. Early reporting increases the chances of recovering lost funds.
conclusion: A Call for Caution and Regulation
The case of the two Cuttack engineers is not an isolated one — it’s a part of a growing pattern in India’s evolving digital economy. While cryptocurrency offers immense potential for financial growth and innovation, the risks cannot be overlooked.
For the government, it’s time to reconsider the current tax policy and bring in a clear regulatory framework that protects users without stifling innovation. For investors, this is a wake-up call to educate themselves, stay cautious, and think twice before clicking on that next big crypto opportunity.
Remember: In the world of cryptocurrency, if something sounds too good to be true, it probably is.
