The Income Tax (IT) Department has unwrapped a fraudulent crypto scheme in the southern states of Telangana and Andhra Pradesh. The scheme involved identity theft, where the fraudsters used the identities of unsuspecting ordinary citizens to carry out trading activities.
According to a Times of India report, this was uncovered after the Central Board of Direct Taxes (CBDT) flagged 20 suspicious cases. Following this lead, officials from the Income Tax Department visited several remote villages across Telangana and Andhra Pradesh. Investigators have been able to verify nine cases where the trading amount reached INR 170 crores, approximately $19.31 million.
In each case, investigators found that ordinary citizens such as farmers and delivery workers were linked to high-value crypto trades. Several people whose names came up in the investigation were astonished when they were approached by officials. When questioned, these individuals denied any involvement, revealing that they had zero knowledge about cryptocurrencies and that they also had no idea their IDs were being used for trading cryptocurrencies.
From farms to fraud
The investigators carried out a probe in more than five districts in Andhra Pradesh and Telangana. Sources also confirmed that most individuals linked to these trades are from lower socioeconomic strata, having no financial literacy, let alone knowledge of cryptocurrencies.
S Narasimha, a farmer whose identity was stolen for the purchase of a cryptocurrency worth INR 9.5 crore, claimed, “We don’t even know what Bitcoin is.” In another case, Shiva Pamula, a food delivery partner being shown to carry out massive volume trades, said he didn’t have an idea about crypto or the trading.
Larger identity theft suspected
The IT officials have cautioned that these verified nine cases may represent only a small fraction of a far larger fraudulent scheme. The racket appears to operate via the theft or falsification of Permanent Account Number (PAN) cards, an identification card issued by the IT department, and other personal details of ordinary citizens. All individuals whose names were used reportedly were non-filers of income tax returns, suggesting the misuse was designed to avoid detection through standard tax filings. The case raises serious concerns about fraud, cybersecurity, and regulatory oversight in India’s rapidly growing crypto sector.
Crypto crimes on the rise across the globe
This is the latest addition to the increasing crypto-related crimes across the world. European nations such as France and the UK have become a hotspot for crypto-related crimes. Earlier this month, the French police detained seven people in relation to the kidnapping of a 20-year-old Swiss man.
Additionally, in August, an Indian court sentenced a former Parliamentarian and senior police officers to life imprisonment in connection with a 2018 Bitcoin extortion and kidnapping case. These incidents highlight the call for strict laws for crypto space.
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