top of page

SCAM SERIES: How a fake cryptocurrency exchange looted millions of Indian investors

Like several other parts of the world, cryptocurrencies have seen a boom in India. Many people have started investing in cryptocurrencies, and they have also seen tremendous growth (and downfall) over the past year. Consider the rise and fall of Bitcoin, for example.


Dips aside, the sudden surge in the coin's value only added to its popularity, further teasing the already emerging market, driving it to growth. Over the past year, crypto transactions in India soared 30 percent. The reason behind it has often been credited to the younger generation that has been trying to find alternative ways of storing and growing their wealth.


However, with popularity comes a growing number of scams. Cryptocurrency scams in India are on the rise. Like everything else, there are scammers out there, doing their best to cash in on unsuspecting investors. The increase in cryptocurrency popularity has not come free of controversies. Scams have been reported across the world and are on the rise in India too. But crypto scams are not a new thing — they existed before cryptos surged in popularity. One such scam is the fake cryptocurrency exchange platform Pluto Exchange which looted billions of rupees from unwary investors.


The setup of a well-planned scam


Pluto Exchange saw a welcoming launch in India in 2017 — a time when people were still curious about cryptocurrencies and often saw it as a volatile yet advantageous mode of investment. Pluto Exchange was said to be a mobile application that would offer solutions that would merge the gap between processors, financial gateways, and banks.


With Bharat Verma as its founder and executive, the exchange aimed to enable bitcoin transactions through a 10-digit mobile number, removing the error possibility which came with bitcoin addresses. As reported by The Hindu, Verma said that the Pluto Exchange app would let users complete a wide range of transactions, including B2B commerce, remittances, regular payments, asset management, trading, and supply chain finance.


So, what went wrong with Pluto Exchange?


The concept of Pluto Exchange being an easy-to-use trading platform may have seemed promising, especially at a time when there was little done to formulate cryptocurrency regulations, and its future lay wary. Many companies do it now, and Pluto Exchange may have stood a fair chance with lesser competition. But it did not turn out as promised.


What began as a legitimate cryptocurrency exchange soon turned into what can be described as a Ponzi scheme. The way that the scam worked was ingenious and straightforward — the company promised investors extremely high returns — in this case, 20-30%. A high return rate such as that could have seemed viable, considering the reputation of bitcoin. Investors who gave in to the scam were promised their investment back with additional interest. And that never happened. Like other Ponzi schemes, investors were promised commission if they roped in other people for investment. The founders then shifted their operations to Dubai, where they did the same thing.


In January 2021, it was reported that 60-year-old Umesh Verma (father of Bharat Verma) was arrested at the Indira Gandhi International Airport while arriving from Delhi. According to Hindustan Times, he was charged with scamming at least 45 people off Rs 2.5 crore — more than $3.35 million. This was not the first time that Umesh had been in trouble with the law. The report highlighted that he had previously been arrested in a gold smuggling case.


Watching out for crypto and bitcoin scams


With several scammers out there, it can be hard to distinguish a cryptocurrency scam. But some awareness can go a long way in preventing it. So, it is better to be alert than sorry. If there are any questions about a particular exchange platform, it is always best to do some research on your own rather than going with the flow and investing a significant sum of money in a fake scheme.


A common piece of advice is that a scheme is not authentic if it sounds too good to be true. Cryptocurrency scams are by no means new, but the technology behind them is. And with bitcoin being a highly lucrative and unregulated market, few have learned to separate the wheat from the chaff.


The introduction of legitimate trading platforms that work by verifying the user is more secure. They also eliminate reliance on third-party traders, thus keeping the money safe with liquidation options at hand. Besides, their helpful customer support can address any issues faced by users and provide the best solution around them, aiding a smoother and safer trading experience.




For more on BTC, Crypto and DeFi in general, subscribe at dWeb Guide and follow us on social media.

bottom of page