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The Indian government has taken a bold stance against financial fraud by attempting to outlaw more than 100 Chinese-run websites that prey on unsuspecting Indian citizens through investment scams. In order to stop these fraudulent platforms, the Ministry of Home Affairs has gotten in touch with the Ministry of Electronics and Information Technology due to scams that bear similarities to the predatory loan app schemes that have been linked to China.
Despite having Indian faces as the front for these scams, investigations revealed that the proceeds ultimately reached Chinese operators. Central agencies identified these websites, prompting the government to take action and initiate the process of banning them. Sources indicate that additional sites may be added to the ban list in the near future.
The modus operandi of these fraudulent websites involved linking to multiple bank accounts, creating a web of financial transactions designed to confuse investigating agencies. The ill-gotten gains were then converted into cryptocurrency, further complicating the tracking process. Several states had alerted the central government to these scams, recognizing the threat they posed to the country’s financial system.
One prominent case involved Hyderabad Police exposing a massive fraud, where a Chinese-run scam accumulated approximately Rs 712 crore. Victims were initially lured through the Telegram app with promises of part-time jobs, evolving into larger investments with deceptive assurances of substantial returns.
These frauds frequently take advantage of Telegram and WhatsApp, two popular instant messaging apps. Notably, according to Hyderabad police officials, some cryptocurrency wallet transactions connected to this fraud were connected to a Hezbollah wallet, a Lebanese militia group.
Similar incidents have been reported in Uttarakhand, Delhi, and Kollam, Thiruvananthapuram, where a victim lost approximately Rs 1.2 crore to Chinese scammers. The use of Chinese payment gateways and Indian money mules by the scammers to elude law enforcement was brought to light by cybersecurity company CloudSEK. Strong measures are required to stop such illegal activities because it is difficult for authorities to track and intercept the money trail due to the complexity of their techniques.
