Bogus platform fees in India result in financial loss for 71-year-old digital artist involved in NFT scam.
In a case of unfortunate deception, a 71-year-old digital artist from India fell prey to scammers who posed as NFT art dealers. The artist, Shivaprasad R (name changed), who is also a practicing chartered accountant, lost INR 1.58 lakhs (approximately $1895) in fees to these scammers, who had promised to purchase his artwork.
Shivaprasad is a well-established artist whose work has been exhibited in numerous local art exhibitions and showcased on social media platforms like Instagram and Facebook. It was in October 2023 that the scammers, disguising themselves as “NFT art dealers,” introduced Shivaprasad to a platform called nfttradeplace.com.
The scammers convinced the artist that they were interested in buying his paintings for a whopping 42 ETH, which is equivalent to INR 1.09 crore, a substantial amount in India. All negotiations were conducted virtually, through email and Facebook.
Eager to seize this opportunity, the digital artist listed three of his artworks for sale at 10 ETH each, and another one for 12 ETH. On February 1, 2024, Shivaprasad was instructed to pay 0.115 ETH to the scammer’s platform as a “gas fee.”
“The victim made the payment from his crypto wallet, which he had set up at the scammer’s request,” revealed a cybercrime investigator.
After successfully completing his first sale, the artist requested a withdrawal of 6 ETH from his earnings. However, days went by, and no transaction was initiated. Upon further inquiry, Shivaprasad was informed that he needed to pay a “delay fee” for allegedly causing a hold-up in the withdrawal process of his cryptocurrency.
“The existence of this delay fee was never mentioned nor displayed on the website,” stated the victim.
Since he did not possess any ETH, Shivaprasad requested the scammers to accept the delay fees in fiat currency. Surprisingly, the scammers agreed, and the victim proceeded to make four payments to the accounts of Mohammed Ekramul Haque and Mohammad Farooq. It remains uncertain whether these individuals are the masterminds behind the scam.
The final payment was made on March 15, after which Shivaprasad realized that he had fallen victim to a deceitful NFT scheme. On April 17, he reported the incident to the cyber police, filing charges under sections 66C (punishment for identity theft) and 66D (punishment for cheating by personation by using computer resources) of the Information Technology (IT) Act, as well as section 420 (cheating and dishonestly inducing delivery of property) of the Indian Penal Code (IPC).
“Tracing cryptocurrency trails is extremely challenging. At present, we are in the process of obtaining bank details and domain information of the email address used by the scammers,” stated an officer familiar with the case.
Despite efforts by local authorities to crack down on cryptocurrency scams in India, there has been a significant rise in such fraudulent activities. Recently, the Enforcement Directorate (ED) initiated an investigation into an $800 million Ponzi scheme involving a Bollywood celebrity. Additionally, a job recruitment scam was uncovered, where scammers exploited spyware disguised as essential onboarding applications to drain victims’ crypto wallets.
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