Government to ban over 100 plus Chinese investment websites and loan apps

By: Pune Pulse

December 6, 2023

Pune: The Government of India has escalated its response to fight financial fraud operations run by Chinese entities by initiating the process of banning over 100 investment scam websites. These websites specifically targeted vulnerable Indian citizens, much like the predatory loan apps associated with China.

Despite the Indian origins of these investment scam websites, the profits ultimately ended up in the hands of Chinese authorities. The Ministry of Home Affairs has officially directed the Ministry of Electronics and Information Technology to block access to these fraudulent platforms.

After identifying the sites, central agencies conducted multiple analyses, leading the government to take steps toward banning them. Further sites are expected to be added to the list of prohibited platforms shortly. Investigations revealed multiple bank accounts linked to the websites, with funds being transferred between these accounts and eventually converted into cryptocurrency, complicating efforts by investigating agencies.

Various states have contacted the center reporting these fraudulent activities, which have had adverse effects on the country’s financial system. In a recent case, the Hyderabad Police uncovered a substantial fraud scheme involving a Chinese-operated scam that amassed approximately Rs 712 crore. The scam targeted victims by luring them with part-time job opportunities through the Telegram app.

A victim approached the Hyderabad Cyber Crime Police after falling prey to a fraudulent ‘Rate and Review’ job advertised on Telegram. Initially, individuals completed simple tasks, invested small amounts and evaluated assignments for financial gains. However, they were gradually drawn into more substantial investments, enticed by false promises of significant returns, ultimately falling victim to the fraudulent scheme.

Instant messaging platforms like WhatsApp and Telegram are increasingly being exploited for these fraudulent activities. Hyderabad police officials disclosed that certain crypto wallet transactions related to these scams were connected to a Hezbollah wallet, despite Hezbollah being a militia group based in Lebanon. In Thiruvananthapuram’s Kollam district, another fraudulent incident involving Chinese scammers resulted in a victim losing approximately Rs 1.2 crore.

Similar incidents have been reported in Uttarakhand and Delhi. CloudSEK, a cybersecurity firm, reported that scammers are evading detection from law enforcement agencies by utilizing Chinese payment gateways and Indian money mules. Senior security analyst Sparsh Kulshrestha highlighted a significant pattern in which scammers exploit Chinese payment gateways due to their user-friendly nature and lack of strict regulations. By using advanced methods that obscure jurisdictional boundaries, scammers can seamlessly transfer funds outside of India, making it increasingly difficult to trace and intercept the money trail.