Indian authorities have arrested three individuals in connection with a large-scale cryptocurrency fraud that duped over 2,000 investors with false promises of high returns.
According to local reports, police in Assam, a northeastern state of India, dismantled the RSN Crypto scam, an elaborate scheme that lured victims with misleading profit guarantees and a fraudulent online investment platform.
Investigators estimate that the scammers amassed between ₹10-20 crore ($1.14-2.29 million) before being exposed.
The perpetrators promoted RSN as a high-yield crypto investment, falsely claiming it would generate a 2% daily return.
However, police found that funds collected from victims were quickly converted into USDT, a Tether-issued stablecoin, through major exchanges like Binance.
The Indian Cyber Crime Coordination Centre (I4C) played a crucial role in tracking the operation.
Investigators discovered that the website was hosted on an Amazon server and linked to entities in China.
While three suspects have been detained, police are still searching for the alleged mastermind behind the scheme.
This case adds to a series of fraudulent crypto schemes in India with suspected Chinese involvement.
Earlier this year, authorities dismantled the Datameer crypto trading app scam, which defrauded at least 700 investors out of ₹10 million ($114,000).
In another major case, the Enforcement Directorate charged 299 Chinese-linked entities last year in connection with the HPZ Token fraud, a crypto mining scam.
With India’s cryptocurrency market expanding rapidly—nearing $2 billion in late 2024—authorities warn that scammers are increasingly preying on small-city investors looking for alternative income streams.
As reported, a growing number of young Indians are turning to crypto trading to supplement their income amid stagnant job growth and slow wage increases.
This rising interest has significantly boosted trading volumes. Cumulative trades in cryptocurrencies like Bitcoin, Ethereum, and Dogecoin on India’s four largest exchanges doubled to $1.9 billion in the last quarter of 2024.
However, India’s stance on cryptocurrencies has been somewhat ambiguous.
The imposition of strict crypto taxes in 2022 and the crypto market downturn led Indian traders to switch to international exchanges, negatively impacting the local crypto industry.
Trading volumes shifted back to Indian exchanges after the ban on offshore entities.
India also made it a priority to achieve global consensus on framing crypto policies as part of its G20 presidency in 2023.
The country successfully obtained agreement from all G20 members on global guidelines.
Nevertheless, India continues to grapple with rigid crypto tax rules.
During the announcement of the fiscal year 2024-2025 budget, Finance Minister Nirmala Sitharaman upheld the controversial crypto tax regulations.
Despite extensive lobbying from the cryptocurrency industry, which presented substantial evidence to advocate for reducing the tax-deducted-at-source (TDS) policy from 1% to 0.01%, the existing rules remain unchanged.
