Cryptocurrency fraud: Over 1,000 Himachal cops lose crores of rupees to 'Korvio Coin' and 'DGT Coin'

More than a thousand police personnel in Himachal's Mandi district fell prey to a fraudulent local cryptocurrency crafted by scammers, an official reported to PTI last week. The Special Investigation Team (SIT), tasked with unravelling the scam, discovered that many police personnel invested significant sums, resulting in substantial financial losses. However, a few profited handsomely, becoming promoters of the fraudulent scheme and enticing more investors.

The scammers, as per the police, deceived at least one lakh people in this cryptocurrency fraud, and they uncovered 2.5 lakh IDs, many of which were duplicates. To attract investors, the fraudsters introduced two cryptocurrencies, "Korvio Coin" (KRO) and "DGT Coin," and established deceptive websites featuring manipulated digital currency prices. They enticed early investors by promising rapid, high returns, and established a network of investors who further expanded the scheme within their own networks.

Among those ensnared in the scheme were police officers, teachers, and others seeking quick gains. Although most of the police personnel faced financial losses, their endorsement of the scheme instilled trust among investors and lent credibility to the investment plan. Some police officers who were involved in the cryptocurrency scheme opted for voluntary retirement and became promoters themselves.

A police official, speaking on the condition of anonymity, disclosed to PTI that some police personnel went for voluntary retirement and became promoters of the scheme. The Director General of Police, Sanjay Kundu, assured that the investigation was progressing systematically and vowed to deal firmly with all wrongdoers according to the law.

Cryptocurrency is a digital form of currency designed to operate as a decentralised medium of exchange via a blockchain-based computer network, independent of central authorities like governments or banks.

The scam commenced in 2018, with a majority of victims hailing from Mandi, Hamirpur, and Kangra districts. In some instances, a single individual managed to recruit up to 1,000 people.

The perpetrators employed a combination of misinformation, deception, and threats to maintain control over their scheme and continue siphoning money from unsuspecting investors by manipulating cryptocurrency prices, leading to significant financial losses.

The scammers presented investment plans related to a locally fabricated cryptocurrency known as "Korvio Coin" or KRO coins, collecting an initial activation fee to activate accounts. Several types of cryptocurrencies were used in the scam.

The criminals constructed counterfeit websites to list their coins and manipulate their prices. Subsequently, they introduced a new coin, "DGT Coin." After a substantial number of people had acquired these coins at inflated prices, the value was deliberately reduced, resulting in substantial financial setbacks for investors.

The investigation also uncovered the existence of other deposit schemes, such as the promise of a 10% monthly return on a Rs 90,000 deposit.

Two principal suspects, Sukhdev and Hemraj, who were apprehended in Gujarat earlier in the month, confessed during questioning to having outstanding liabilities of Rs 400 crore. The alleged mastermind of the scam, Subash, remains at large.

Here are some steps you can take to reduce your risk of falling victim to cryptocurrency scams:

1. Educate Yourself: Knowledge is your best defence. Take the time to understand how cryptocurrencies work, the technology behind them (blockchain), and the common types of scams.

2. Use Reputable Exchanges: Only use well-established and reputable cryptocurrency exchanges for buying, selling, and trading cryptocurrencies. Research an exchange's history, security measures, and user reviews before using it.

3. Secure Your Wallets: If you hold cryptocurrencies, use hardware wallets or secure software wallets. Enable two-factor authentication (2FA) on your wallets and exchange accounts. Never store large amounts of cryptocurrency on exchanges.

4. Beware of Phishing: Be cautious of phishing emails, websites, and social media accounts. Scammers often create fake websites and send fraudulent emails that mimic legitimate services to steal your login information.

5. Double-Check URLs: Always verify the website URL before entering any personal or financial information. Make sure the website uses HTTPS, but even that is not a guarantee of safety.

6. Be Skeptical of "Guaranteed Returns": If an investment or project promises guaranteed, high returns with no risk, it's likely a scam. Use critical thinking and avoid "get-rich-quick" schemes.

7. Avoid Pump-and-Dump Schemes: Be cautious of groups or individuals promoting a cryptocurrency that's about to "explode" in value. These are often pump-and-dump schemes designed to artificially inflate the price before the scammer sells their holdings.

8. Use Common Sense: Trust your instincts. If something seems too good to be true or feels off, it probably is. Don't let greed cloud your judgment.

9. Report Scams: If you come across a cryptocurrency scam or suspect fraudulent activity, report it to the appropriate authorities or platforms. This can help protect others from falling victim.

10. Consult Financial Experts: If you're unsure about a particular investment or opportunity, seek advice from financial experts or knowledgeable individuals who are well-versed in the cryptocurrency space.