Cryptocurrency

Bitcoin Traders in India are no Longer at Ease


Jun 07, 2019 at 10:20 // News

Bitcoin and cryptocurrency traders in India are not benefiting from the industry following the ban of cryptocurrency activities by the Reserve Bank of India (RBI) in April last year, and this is making their social life hard. The peer-to-peer (P2P) system that was developed by cryptoasset exchanges has some voids in it and hackers have taken advantage of this to fraud people and most of them have become or are yet to be victims.


New Tactics Used by Hackers   


Crypto Kanoon, a crypto expert analyst, revealed that his legal advisor Mohammed Danish, gathered around 10 different cases related to digital asset fraud being conducted these days. Mohammed revealed that attackers doing this illicit activity, execute in this way:

  1. At the outset, the hacker attacks individual’s bank account or a PayTM account in some circumstances.

  2. Hacker then creates a false ID on any of the cryptocurrency exchanges. It is made by using false identity verifications designed using Photoshop.

  3. After it has been accepted, the attacker purchases some Bitcoin from any available users on cryptocurrency exchange through peer-to-peer system. The user transfers to him some Bitcoin, and the attacker move the payment to the user’s bank account

  4. And at this particular point, the key element of deception happens. The payment conducted to the user for buying Bitcoin is carried out not from attacker’s own account but using the compromised ID of first person we mentioned in step #1.

  5. The real holder of the compromised bank account gets to understand that one was attacked when some of the payments are already carried out.  And that’s when the victim will start going to different authorities like the police to report the incidence. Police starts to investigate the events that happened on the compromised bank account, but because the hackers have a lot of knowledge, they quickly freeze the selling Bitcoin account. So, the authorities register the case against the final seller for deception. The seller finds himself behind bars with no case, and his/her account frozen due to the fraud game. The hacker doesn’t stop from there; he continues attacking other accounts using the same fraud tactics.


Many Queries Few Answers   


However, the crypto community in India is asking why the exchanges allow false user IDs to remain active, how do they even get verified and registered in the first case? Remember, the exchanges take like 2 working days to fully accept the registered account, with the aim of protecting Indians, but this does not stop illicit hackers from doing their evil operations. In case you become a victim of this kind of fraud, and your bank account becomes closed, make sure you get the legal advice from the lawyer with the knowledge on cryptocurrencies.  


In late March, the supreme court of India
suspended the digital currency versus RBI case trial to next month (July), following thee orders that came from above. The government’s counsel ordered them to extend the hearing, so as it can take time to clearly diagnose the scenario and come up with a clear judgement.


Earlier this year, a body under the RBI called the “Institute for Development and Research in Banking Technology (
IDRBT)” proposed a clear roadmap and blueprint for bitcoin, digital currency and distributed ledger technology for banks and other major financial institutions in the country. The effort is anticipated to rise the adoption of blockchain and further help in the formation of a strong regulatory framework.



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