Crypto Investment Scam: How Fraudsters Use Honey Traps To Target Victims

Cryptocurrency investment scams are increasing as fraudsters target investors through various fake schemes. These scams are linked to fake investment opportunities and misleading claims that result in financial losses to investors. One such type of scam is the honey-trap scam.

A honey-trap in such cases refers to a method where scammers first make contact with a person. This interaction is then used to influence the victim and introduce investment-related claims.

In a recent case, a retired bank manager was allegedly cheated of over Rs 2.50 crore after being contacted through social media and persuaded to invest in cryptocurrency.

According to a report in the Times of India, a woman identified as Ira Reddy allegedly contacted the victim through social media and persuaded him to invest in cryptocurrency by luring him in a high returns trap. The victim named Anil Kumar Singh Chauhan, was reportedly cheated between July 26 and August 28, 2025.

To fund the investment, the victim reportedly took a loan of Rs 1.98 crore under the pretext of buying a flat. He, however, diverted the money in the fake crypto scheme. The fraudsters later diverted the money through multiple transactions, ultimately taking the victim's total loss to Rs 2.52 crore.

The accused network allegedly used social media platforms, messaging apps and fake cryptocurrency trading portals to lure victims with promises of high returns and later distributed the funds across multiple states to avoid detection.

The defrauded money was reportedly routed through several bank accounts spread across multiple states, which includes Uttar Pradesh, Uttarakhand, Bihar, West Bengal, Andhra Pradesh and Assam, in an attempt to hide the movement of funds.

During the investigation, one accused, Vipin Kumar, was arrested. With this the total number of arrests in the case has reached four.

The case has once again highlighted why it is important to remain vigilant and not get lured by promises of unusual high returns in bogus investment schemes.