An Indian man has been sentenced to a prison term of five years in the US for operating a fake Coinbase website and conducting a fraud of around $20 million.
According to official documents, Dena J. King, the US attorney for the Western District of North Carolina, announced that a citizen of the Republic of India was sentenced to prison for stealing over $20 million from hundreds of victims by using phony or “spoofed” websites that imitated the cryptocurrency exchange website Coinbase.
Chirag Tomar, 31, was sentenced by U.S. District Judge Kenneth D. Bell to 60 months in jail and two years of supervised release.
What Was The Alleged Scam?
In accordance with court filings and the sentencing hearing, Tomar and his accomplices began a spoofing operation as early as June 2021 to steal millions of dollars in cryptocurrency from hundreds of victims across the globe and in the US, including the Western District of North Carolina.
In terms of cybercrime, spoofing is the act of a malevolent cyber actor disguising an email address, sender name, or website URL in order to deceive victims into believing they are communicating with a reliable source.
According to court documents, Tomar and his accomplices carried out the fraud by impersonating Coinbase, one of the biggest cryptocurrency exchanges in the world that lets users buy, sell, and trade virtual currencies.
Crypto Losses Pose Huge Threat to Industry
The reported losses from investment fraud schemes related to cryptocurrencies increased by 53% from $2.57 billion in 2022 to $3.96 billion in 2023.
Though the industry has become more sophisticated now, even in 2024 the cases of crypto scams and frauds have not stopped yet.
The greatest complaints about bitcoin investment fraud have been filed by those between the ages of 30 and 39 and 40 and 49 (about 5,200 complaints in each age group), whereas those over 60 reported the largest losses (more than $1.24 billion).
Crypto money at present is being used for multiple transactions. Be it day-to-day bills or even hefty deals. However, because of their intrinsic qualities, cryptocurrencies run a higher danger of being used as a weapon for fraud, ransomware, money laundering, and financing terrorism.
According to the Association of Certified Fraud Examiners, cryptocurrency use was a factor in 8% of all fraud cases worldwide. Of these cases, 48% involved payments for bribes and kickbacks, and 43% involved the conversion of looted assets to cryptocurrency.