Crypto Scams in India – How They Work & What Legal Action You Can Take (Expert Advice by Adv. Siby Varghese)
As cryptocurrency becomes more popular in India, so do the risks. With rising investments in Bitcoin, Ethereum, and other digital assets, crypto scams in India are also growing fast. From fake investment platforms to social media influencers pushing shady schemes, scammers are finding new ways to steal people’s money.
Adv. Siby Varghese, a well-known cybercrime lawyer and founder of Shield Law Firm, shares how these scams work and what legal action for crypto scams is available to victims.
What Is a Crypto Scam?
A crypto scam is any fraud where someone tricks you using cryptocurrencies. These scams often promise high returns, quick profits, or exclusive investment opportunities. Most of them happen on platforms like WhatsApp, Telegram, Instagram, and fake websites.
Common Types of Crypto Scams in India:
-
Ponzi Schemes
Promise unrealistic returns (like 10% daily)
Early users are paid using money from new investors
Scheme crashes when no new money comes in -
Pump-and-Dump
Scammers promote a cheap coin heavily
Price rises artificially, then they sell
New investors lose when price crashes -
Fake Influencers & Online Courses
Luxury lifestyle, fake testimonials, and crypto “masterclasses”
Charge high fees for useless or misleading content -
Phishing & Fake Exchanges
Fake websites that look like real crypto platforms
Ask for your login info or wallet keys
Once shared, your crypto is stolen
Is Crypto Trading Legal in India?
Yes, crypto trading is legal in India, but it comes with rules. Cryptocurrencies are not legal tender, which means they can’t be used like rupees to pay for goods—but trading them is allowed.
Important Crypto Rules in India:
-
30% tax on crypto profits
-
1% TDS on each trade
-
KYC and AML compliance is mandatory
-
The Supreme Court lifted the RBI ban in 2020
Which Indian Laws Can Help You Take Action After Crypto Fraud?
If you’re searching “what to do after crypto fraud against me”, here’s the good news: India has laws that protect you.
Applicable Laws for Crypto Scam Victims:
1. Bharatiya Nyaya Sanhita (BNS):
-
Section 318(4) – Cheating using dishonest means
-
Section 228 – Creating or using fake evidence (screenshots, websites)
-
Section 238 – Hiding/deleting proof after committing fraud
2. Criminal Breach of Trust:
Used when someone misuses the crypto you gave them in good faith
3. Information Technology (IT) Act:
-
Section 66D – Impersonating someone online to cheat
-
Section 67A – Using tech for mass harm or fear (applies in bigger frauds)
-
Cyber Hacking & Data Theft – Stealing access to your wallet or exchange account
4. Consumer Protection Act:
If you bought fake courses or services, you can file a complaint for:
-
Misleading advertisements
-
Unfair trade practices
-
Poor-quality services
Real-Life Case: Bitconnect Scam
Bitconnect was a global Ponzi scheme that affected many Indians. Promising daily returns from crypto investments, it used fake testimonials and celebrity endorsements. When the scam collapsed, investors lost millions.
Adv. Siby Varghese says: “Cases like Bitconnect show the need for stronger legal awareness and quicker legal response in India.”
How to Identify a Crypto Scam (Checklist)
-
✅ Promises of “Guaranteed Returns”
Any fixed daily profit (e.g., 5% a day) is a red flag -
✅ No Company Info
Scam websites often hide team details or office addresses -
✅ Urgency & Pressure Tactics
“Only today” offers are signs of fraud -
✅ Fake Screenshots/Testimonials
Edited images and reviews are easy to create
What to Do After Crypto Fraud Against You
If you’ve been scammed, don’t panic. Take these steps immediately:
1. File a Police Complaint
Go to your nearest police station or visit India’s official cybercrime portal:
🔗 https://cybercrime.gov.in
2. Contact the Cyber Crime Cell
They handle online frauds and cryptocurrency-related scams.
3. File a Complaint in Consumer Court
If you paid for fake courses or services.
4. Save All Proof
Preserve:
-
WhatsApp/Telegram chats
-
Payment receipts
-
Screenshots and emails
5. Get Legal Help from a Cybercrime Lawyer
A specialist like Adv. Siby Varghese can help you draft complaints, send legal notices, and even file court petitions.
Possible Legal Punishments for Crypto Scammers
|
Law |
Offense |
Punishment |
|
BNS 318(4) |
Cheating |
Up to 7 years + fine |
|
BNS 228 |
Fake evidence |
Jail + fine |
|
IT Act 66D |
Online impersonation |
3 years jail + ₹1 lakh fine |
|
IT Act (General) |
Hacking/data theft |
Up to 10 years |
|
Consumer Protection |
Misleading ads/services |
Refund + compensation |
Tips to Stay Safe in Crypto Investing
-
✅ Use well-known crypto exchanges with KYC
-
✅ Enable two-factor authentication
-
✅ Never share private keys, passwords, or OTPs
-
✅ Avoid shady Telegram or WhatsApp groups
-
✅ Do background checks on influencers or schemes
-
✅ Don’t fall for luxury lifestyle traps or hype
Need Legal Support? Contact Adv. Siby Varghese Today
If you’ve been a victim of a crypto scam, Act Now. Legal action can help recover your money and stop the scammer from hurting others.
📞 Call: +91 88849 99803
🌐 Website: www.sibyvarghese.com
Adv. Siby Varghese
Cybercrime & Crypto Lawyer
Co-Founder, Shield Law Firm
Co-Founder, Vakeel at Home App – Legal Tech for India’s Lawyers
If you have any objection to this press release content, kindly contact [email protected] to notify us. We will respond and rectify the situation in the next 24 hours.
