Allegations of a $78 million crypto fraud and a police raid are rocking Assembly elections in India’s Maharashtra state, which are underway at press time.

Maharashtra is India’s wealthiest state and home to the country’s financial capital, Mumbai. The ruling Mahayuti alliance, which includes prime minister Narendra Modi’s BJP party, faces main opposition from the MVA, a coalition that includes the NCP (SP).

Just days before polling opened, a former police officer accused MP Supriya Sule of the NCP (SP) of misappropriating seized bitcoin to fund its election campaign. They claim that Sule and state Congress chief Nana Patole took bitcoin that had been confiscated by police from a 2018 fraud case.

• In 2018, crypto dealer Amit Bharadwaj was arrested by Pune police and his wallet containing Rs 6,600 crore ($78 million) was seized.
• The whistleblower claims that former Pune Police Commissioner, Amitabh Gupta, instructed the wallet to be swapped out.
• Sule and Patole allegedly got hold of the original wallet and sold the bitcoin to influence the elections.

BJP shares voice clips of Sule, sparking lawsuit and AI debate

Modi’s BJP party soon echoed these allegations. BJP leader Sudhanshu Trivedi shared videos and voice recordings claiming to show Sule and those involved discussing these crypto transactions.

On Wednesday, Sule’s cousin and Maharashtra deputy chief minister Ajit Pawar said that the voice recordings were authentic and called for a formal investigation to begin.

“I know the voices of Supriya Sule and Nana Patole very well,” Pawar said. “The voices in the audio clips belong to both of them.”

Read more: India disconnects 20M phone numbers in ‘cyberslave’ crackdown

Sule, daughter of prominent politician and cricket chief Sharad Pawar, has denied the allegations. “Ajit Pawar can say anything,” she hit back. She claims the voice recordings are false, and has filed a criminal cyber fraud complaint against the former police officer who initially accused her.

“They have apparently attempted to create a fake voice of [Sule] to add fake credibility to their allegations,” the complaint reads. “This amounts to criminal impersonation […] with an intent to defraud and defame.”

Across X, onlookers appear divided over the authenticity of the recordings. Side-by-side comparisons by prominent fact-checker Mohammed Zubair suggest that the voices follow a rigid, monotonous rhythm compared to audio from other sources, which may suggest that AI was involved.

The Maharashtra Assembly elections are still underway at press time, with a recorded 45.53% voter turnout as of 3pm.

During the polling, police raided the home of the man accused of assisting Sule and Patole in the bitcoin theft at the alleged instruction of the Pune Police Commissioner.

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Growing reports of Indian citizens becoming enslaved in South East Asia to commit cybercrime and cryptocurrency fraud has forced the government to tighten security checks for SIM cards and disconnect over 20 million mobile connections.

More than 29,000 Indians are believed to be trapped in Thailand, Cambodia, Myanmar, and Vietnam, where they are forced to scam their fellow citizens. Lured under the guise of a well-paying job, their money and passports are confiscated on arrival.

These cyberslaves are given phones that will mask their location and present as an Indian mobile number. They’re told to call Indians and lure them into cryptocurrency scams, identity theft, pig butchering scams, and more. They’re threatened and beaten if they don’t comply.

The Indian Cyber Crime Coordination Centre (I4C) has reportedly received around 100,000 cybercrime complaints since January 2023. Of those cases, a whopping 45% originated in South East Asia.

The Union Ministry of Telecommunications said that it has identified several ways to mitigate the sheer number of overseas scam calls. It plans to block more than 20,000 mobile handsets and disconnect 21.7 million connections that have been fraudulently acquired or found to be associated with cybercrime, the Indian Express reports.

What’s more, tighter know-your-customer (KYC) checks will be implemented for SIM cards. All telecom providers must now provide weekly data in order to pinpoint fraudulent numbers, and police have been asked to take action against SIM card sales agents found to be supplying these cybercrime rings.

Read more: Cambodian crypto camp reporter jailed over Facebook, X posts

These cyberslaves come from all across India, but according to the Business Standard, over 33% are from Punjab, Maharashtra, and Tamil Nadu. Over half are between the ages of 20 and 39 (17,115); men account for more than 72% of the missing persons (21,182).

Thailand appears to be the country attracting the vast majority of these cyberslaves — over 69% of reported cases (20,450) travelled to the country and never came back. Over 5,000 Indians are believed to be ensnared in Cambodia to commit cyber- and crypto-related crimes.

India’s Department of Telecommunications (DoT) began taking action against this growing threat in May, when it ordered telecom operators to block all incoming international calls that pretended to be an Indian mobile number. According to the Indian Express, 35% of incoming international calls are subsequently being blocked.

Meanwhile, a high-level task force is working on tightening checks at immigration to better identify potential cyberslaves before they leave India. More information is being gathered on those already ensnared, and India’s intelligence agencies and government departments are discussing further solutions.

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Users of Indian crypto exchange WazirX have been told that they are likely to lose more than 40% of any funds they had on the platform, following a $234 million hack in July.

WazirX is currently undergoing a restructuring process in the wake of the hack and last week asked Singapore’s high court for “breathing space” to allow it to work on finding the “fastest and most effective process for users to receive improved token recoveries.”

However, as reported by TechCrunch, according to the restructuring firm working with WazirX, customers will likely have to give up “at least 43%” of their funds.

Kroll director George Gwee said that the best users could hope for would likely be “anywhere between 55% and 57% of the funds,” with WazirX stating that its priority would be to distribute remaining token assets to users in a pro-rata manner via crypto.

According to the firm, “The impact from the cyberattack will be allocated pro-rata across users who rank equally with each other as unsecured creditors.”

It added that “users will receive a share of available token assets associated with the platform proportionate to their share of all users’ unsecured claims for their account balances.”

Any approved scheme is expected, according to the firm, to “take at least six months and is the fastest route to allowing the reopening of cryptocurrency withdrawals.”

Read more: Mt. Gox to start creditor repayments next month, asks users to ‘wait a while’

WazirX says it will be holding a town hall via video conference in the week commencing 2 September 2024 to explain the key features of the requested moratorium and to address user questions.

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Binance and Kraken are among at least nine crypto exchanges that have had their apps pulled from Apple’s App Store in India after the country’s government accused them of not adhering to its anti-money laundering rules.

As reported by TechCrunch, Huobi, Bitfinex, and Bittrex were also issued show cause notices by India’s Financial Intelligence Unit (FIU), the government body responsible for looking into financial transactions.

The apps are still available to users who have already downloaded them and are still available to download via the Google Play Store.

Read more: Over 1,000 Indian police caught up in $240M crypto scam

India’s main bank already tried blanket crypto ban

As detailed by TechCrunch, Indian authorities have been accused of driving the country’s traders to global or non-compliant services through its implementation of new tax laws.

Last year, India began levying a 30% tax on gains and a 1% deduction on every single crypto transaction.

The Reserve Bank of India has previously attempted to ban cryptocurrencies altogether, with senior figures likening the class to a Ponzi scheme. However, the move was eventually blocked by India’s Supreme Court.

Earlier this week, Indian crypto platform CoinDCX, which was one of the first to warn the Indian government of the effects of its new tax laws, promised to reward customers who move their crypto from global exchanges to its India-based platform.

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India’s anti-terrorism squad has made an arrest after an unnamed person threatened to bomb the International Airport of Mumbai unless it handed over $1 million worth of bitcoin within 48 hours.

According to The Times of India, the threat was emailed to the Chhatrapati Shivaji Maharaj airport at around 11 am on Thursday. 

The email’s subject read “Blast,” followed by, “This is a final warning to your airport. We will blast Terminal 2 within 48 hours unless one million dollars in Bitcoin are transferred to the address. Another alert will be after 24 Hrs.”

An executive of Mumbai International Airport Limited said, “I was at the quality and customer care center in the airport when I came across the threat mail. The threat mail claimed to blow up the airport within 48 hours if the ransom was not paid.”

The Free Press Journal reports that a suspect from the city of Thiruvananthapuram, Kerala, has been arrested by Maharashtra’s anti-terrorism squad and accused of sending the threatening email.

Read more: Accused spy leaked Indian naval secrets for crypto

Police from Sahar, Mumbai, reportedly tracked down the internet protocol (IP) address of the unnamed individual who sent the threat, providing a rough idea of where the email was sent from.

Sahar police said, “The cyber section in the police station has tracked the location and the team is in the process of identifying the person behind sending the threat.”

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State secrets revealing the details of Indian Navy submarines and warships have reportedly been leaked to Pakistani intelligence operatives by an Indian spy in exchange for crypto, an offense punishable by death.  

As reported by local media, the National Investigation Agency (NIA) accused Manmohan Surendra Panda of spying for Pakistani operatives before selling the confidential naval documents.

The Mumbai resident allegedly exchanged India’s classified information with an operative identified as ‘Harsh’ and received payment through “crypto channels” for his spy work. He supposedly received the crypto payment from various other Pakistani operatives.

Panda is charged with spying under Section 3 of The Official Secrets Act (OSA), conspiracy towards acts of terrorism under Section 18 of the Unlawful Activities (Prevention) Act, and destroying evidence under Section 201 of The Indian Penal Code.

According to The OSA, the penalty for spying “where the offence committed is… in the interest or for the benefit of a foreign power, or is in relation to any work of defence, arsenal, naval, military,” can carry the death penalty or 14 years in prison.

Panda also faces life imprisonment under his conspiracy charge. He was reportedly arrested months ago. 

Wife and husband sold submarine secrets for crypto

A similar instance occurred in 2021 when an American couple decided to sell confidential information relating to US nuclear submarines in exchange for $100,000 of the privacy-oriented crypto Monero. 

The couple offered snippets of confidential documents to someone they believed represented a foreign power but was, in fact, an undercover FBI agent. 

They uploaded the documents onto SD cards before hiding them in everyday objects and placing them in designated drop-off points. Some of the inconspicuous items included a peanut butter sandwich, a chewing gum packet, and band-aid packaging.

Read more: Ex-NSA worker sold gov’t secrets for crypto to benefit Russia

The couple pleaded guilty to the espionage plot in 2022. Jonathan Toebbe was sentenced to over 19 years in prison while his wife, Diana Toebbe, received more than 21 years. 

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Over 1,000 Indian police officials have been caught up in a fake crypto scam that managed to dupe more than 250,000 victims out of an estimated Rs 2,000 crore ($240 million).

According to India Today, the Ponzi-style scheme enticed investors with promises of hefty returns on investment in two fictitious cryptocurrencies, Korvio Coin (KRO) and DGT Coin.

Victims, tempted by the promise of massive bitcoin-like gains, were fooled by fake websites displaying manipulated prices for the non-existent currencies. They were also encouraged to recruit more individuals with the money handed over by these new recruits used to pay older investors.

Police officers from Himachal Pradesh’s Mandi district reportedly lost millions of rupees to the scammers but while many were content to recoup their losses, some also became promoters, using their standing in the local community to attract other unsuspecting victims.

According to Tribune India, senior police sources say “It is a huge scam involving around Rs 2,000 crore and 2.5 lakh investors.” Two arrested suspects have reportedly confessed to owing $48 million (Rs 400 crore) to investors tricked by the crypto scam.

Read more: Texas city locals warned of crypto scam impersonating FBI

Addressing rumors of police involvement at an earlier press conference, Himachal Pradesh director general of police Sanjay Kundu assured those in attendance that everybody with a part to play would be dealt with according to the law. “We will get all the wrongdoers. The investigation is progressing in an organized and planned manner,” he said.

Earlier this month, a special investigation team (SIT) conducted searches spanning 35 locations, seven districts, and one police district in Himachal Pradesh. These raids turned up evidence including property records, documents, electronic devices, and mobile phones, and led to the arrests of seven people.

So far, police have arrested a total of nine individuals in relation to the scheme with two of those, known as Sukhdev and Hemraj, confessing to having over Rs 400 crore ($48 million) in liabilities relating to the scam.

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Coinbase says it’s still dedicated to its exchange business in India despite disabling new user sign-ups in the country three months ago.

The company has also moved to reassure Indian users about the exchange’s future after a number of customer emails seemed to suggest that it might be shuttering its operations in the region.

A number of Indian users reportedly received messages from the exchange informing them that they had until later this month to move their funds before Coinbase halts its services.

However, the US-based firm has since pointed out that these emails were specifically addressed to “some customers who didn’t meet the company’s updated standards” and that “the message was not representative of Coinbase’s India operations,” (via TechCrunch).

In a statement, a Coinbase spokesperson said: “We stopped allowing new user sign-ups on our exchange product in India back in June of this year. We maintain a robust tech hub in the country and offer live products, including our Coinbase Wallet.

“We are committed to India over the long term and continue to explore ways to strengthen our presence in this important market.”

Read more: Coinbase tells SEC it no longer thinks crypto is the future of finance

Coinbase in India started badly and got worse

Since launching in India in April last year, Coinbase has found making inroads into the country heavy going.

Shortly after launch, despite Coinbase boasting about how easy it would be to trade on its app using Unified Payments Interface (UPI), the National Payments Corporation of India (NPCI) — the organization that governs payment processing in the country — tweeted to clarify that it had no record of any crypto exchange doing so.

As a result, the exchange suspended its operation.

Speaking at the time, a source close to the matter told CoinDesk, “What Armstrong and Coinbase don’t get is that in India, RBI (the Reserve Bank of India, which oversees the NPCI) is the all-mighty in the financial world and you can’t just come in and do whatever the hell you want whoever you may be and not expect backlash.”

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A $120 million crypto Ponzi scheme that scammed over 200,000 victims has come to an end as authorities in India claim to have arrested the man behind operations within the country.

Forty-year-old Gurtej Singh Sidhu was arrested yesterday in Odisha for his alleged role in Solar Techno Alliance (STA). Launched in 2021, the scheme claimed to be a blockchain-based company shortening the delivery time between customers and farmers with an emphasis on solar technology. 

Jai Narayan Pankaj, chief of the Economic Offence Wing (EOW), announced on Tuesday that “the STA runs a huge Ponzi multi-level marketing scheme in the garb of crypto token.” He said the “STA uses the socially popular terms like green energy and solar technology to mask its crypto Ponzi scam” that accumulated 10 billion rupee ($120 million at press time).

According to the Hindu Times, authorities opened up an inquiry into the STA after the scheme was discovered to be run from Odisha, Bhadrak, Balasore, Bhubaneswar, Mayurbhanj, Jajpur, Kendrapada, and Keonjhar districts. 

Read more: Hackers used fake job interview to trigger $37M CoinsPaid hack

Members of the STA were reportedly promised a salary between $20 and $3,000 a day so long as they kept recruiting new members. Pankaj said, “Like any other MLM scheme, members initially got some monetary benefits which tempted them to add more and more members under them.” 

The crypto scheme is also run by Hungarian David Gez. Both Gez and Sidhu reportedly led expensive lifestyles and surrounded themselves with fast cars and designer clothes. 

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