In a decisive move against financial fraud, the Government of India has launched a comprehensive initiative to ban over 100 Chinese-operated investment scam websites that have been preying on Indian citizens, in a fashion similar to the predatory loan apps previously traced back to China.
Although the facade of these investment scam sites presented an Indian identity, investigations revealed that the proceeds ultimately flowed into the hands of Chinese operators. In a report by News18 that cites sources in the government, the Ministry of Home Affairs has formally communicated with the Ministry of Electronics and Information Technology to enforce the blocking of these websites.
The identification of these fraudulent platforms was a result of extensive efforts by central agencies, involving multiple analyses that prompted the government to initiate the process of banning them. Additional sites are likely to be added to the ban list in the coming weeks.
These websites were found to be intricately linked to multiple bank accounts, with funds being transferred between accounts to confound investigating agencies. The money, in turn, was converted into cryptocurrency to further obfuscate the trail.
Concerns about such scams affecting the country’s financial system were raised by various states, prompting the government to take proactive measures.
Hyderabad Police uncovered one of the largest scams of this nature, where a Chinese-operated scheme amassed approximately Rs 712 crore. Victims were enticed through the Telegram app with promises of lucrative part-time jobs. A complainant informed the Hyderabad Cyber Crime Police that he fell victim to a ‘Rate and Review’ job posted on Telegram.
Initially, victims engaged in simple tasks, investing small amounts and completing assignments for promised profits. Gradually, they found themselves ensnared in larger investments, lured by deceptive assurances of substantial returns, ultimately falling prey to the scam.
These fraudulent activities increasingly exploit instant messaging platforms like WhatsApp and Telegram for their operations. Notably, some cryptocurrency wallet transactions associated with this fraud were traced back to a Hezbollah wallet, according to Hyderabad police officials. Hezbollah is a Lebanese militia group.
Another instance of fraud was reported in Kollam, Thiruvananthapuram, where a victim lost approximately Rs 1.2 crore to Chinese scammers. Similar cases have also been reported in Uttarakhand and Delhi.
CloudSEK, a cybersecurity company, had a month ago revealed in an investigation that scammers are successfully evading detection by law enforcement agencies with the assistance of Chinese payment gateways and Indian money mules.
“A notable trend we’ve observed is scammers exploiting Chinese payment gateways due to their relative ease of use and limited regulatory scrutiny. These gateways offer a convenient bridge to funnel funds outside India, leveraging sophisticated techniques that blur jurisdictional lines, making it challenging to track and intercept the money trail,” commented Sparsh Kulshrestha, a senior security analyst.
In recent years, the Government of India has taken action against approximately 250 Chinese apps, citing concerns related to the sovereignty, integrity, defence, security, and public order of the country.
Popular apps such as TikTok, Xender, Shein, and Camscanner, with millions of downloads in India, were among those banned. Authorities argued that these apps were allegedly collecting sensitive user data and seeking unnecessary permissions, with servers in foreign nations misusing the acquired data.
(With inputs from agencies)
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