cryptoHow To Recover Funds In Crypto Fraud?
According to the US Federal Trade Commission (FTC), some $575 million worth of cryptos has been stolen on the pretext of bogus investment opportunities since 2021.
The FTC report further notes that nearly half of the people who reported losing cryptos to a scam were lured by ads or social media messages posted by scamsters.
In Q1 2022 alone, $329 million worth of cryptos was stolen. It shows frauds in the crypto space have been rapidly rising.
So, what happens if an exchange shuts down and the owners are untraceable as the market is unregulated? Is the investors’ money safe?
Mehta explains, “Whenever someone is siphoning my funds for whatever reasons — if there is a scam — then chit funds cases are filed. So there exists a proper framework for anybody to protect investments.”
He noted that it is a fraud case when the crypto platforms shut down, and owners run away with investors’ money.
It is possible that investors would never get their money back, and if they’re lucky enough, they might get it after a long legal battle, he said.
“We have a lot of illegitimate crypto businesses springing up in our country. Therefore, investors need to know what they are investing in. Crypto platforms adhering to KYC norms are legitimate, and there’s no way they can run away with your money,” Mehta added.
He also advises: “The government needs to be more diligent and has to come up with regulations that can curb the rampant crypto crimes.”
However, what if the exchange is outside India, such as Vauld? Can Indian investors get back their money?
According to Mehta, there is no legal remedy as the entity is based outside the country, and the Indian laws will not be applicable there.