India’s financial crime agency has charged eight individuals and two firms over an alleged cryptocurrency fraud that siphoned more than $20 million by mimicking a legitimate trading platform. The Directorate of Enforcement said the operation was led by Chirag Tomar, who is accused of orchestrating a network that harvested user credentials and diverted funds into controlled wallets.
Authorities said Tomar has already been convicted in the United States and sentenced to five years in prison, followed by two years of supervised release. Indian investigators obtained key evidence through formal information-sharing channels with U.S. counterparts.
How the scheme worked
According to investigators, the group created spoofed login pages that closely resembled a genuine platform’s interface. These fake portals were used to capture usernames, passwords, and two-factor authentication codes. Once accounts were compromised, funds were transferred, routed through multiple wallets, and eventually converted into rupees via peer-to-peer transactions.
The Directorate said the proceeds were funneled into accounts linked to Tomar, his family, associates, and related entities. The funds were then distributed across multiple accounts and used to acquire both movable and immovable assets.
Assets seized and probe expands
Officials have attached assets worth 64.55 crore rupees, or about $6.8 million, as part of the ongoing investigation. The action marks a broader push by Indian authorities to clamp down on crypto-related financial crimes and cross-border fraud.
The case follows the earlier arrest of Ayush Varshney, a technology executive tied to the GainBitcoin fraud, underscoring a wider enforcement drive across the sector.
Rising adoption fuels larger target base
India continues to rank first globally in crypto adoption, according to a 2025 report by TRM Labs. The study found adoption across South Asia rose by 80% between January and July 2025 compared with the same period a year earlier.
With more than 119 million users, the country has become a prime target for fraud schemes. Government data shows reported fraudulent and suspicious transactions jumped 773% in the first eight months of the last fiscal year.
Phishing bypasses blockchain security
The case highlights a method that avoids breaking blockchain systems entirely by targeting access credentials instead. Attackers exploit trust by replicating legitimate platforms, tricking users into voluntarily handing over sensitive information.
Security research indicates that 62% of individual theft incidents in 2025 were linked to compromised online wallets and browser extensions, reinforcing the vulnerability of account-based access.
Market volatility and regulatory risks add pressure
Recent market turbulence has added to the risk environment. Bitcoin briefly fell below $63,000 in early June before showing a modest recovery, a backdrop that can make high-return promises more appealing to traders.
At the same time, tighter oversight ahead of the 2026 tax season is increasing complexity. New rules require detailed reporting of every transaction, a shift that could be exploited through phishing campaigns posing as official communications from tax authorities or trading platforms.
Staying cautious in a high-risk environment
Authorities and analysts warn that traders should remain vigilant when accessing online platforms. Verifying website addresses, avoiding unsolicited links, and using secure storage methods such as hardware wallets are increasingly seen as essential measures as fraud schemes continue to evolve alongside growing adoption.
To protect your funds from phishing-style crypto scams, learn essential safety steps in this security guide today.
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