CID Study Highlights Surge in Crypto Scams Amid India’s Unregulated Digital Asset Market

A recent CID study presented at a senior police officers' conference reveals a troubling escalation in cryptocurrency-related scams across India. The unregulated nature of digital assets, coupled with their growing use as deposits on gaming platforms and online casinos, has created fertile ground for financial crimes. These platforms obscure transaction trails, complicating recovery efforts for victims.

Cybercrime losses in Karnataka alone skyrocketed to Rs. 2,915 crore ($349 million) in 2024—a fourfold increase from previous years, according to National Cyber Crime Reporting Portal data. Money mules have become unwitting accomplices, with criminals exploiting bank accounts to layer stolen funds through investment frauds and ransomware schemes before converting proceeds to cryptocurrency via peer-to-peer networks.

The report, co-authored by cybercrime specialists and the Data Security Council of India, warns that P2P crypto transactions are increasingly serving as exit ramps for illicit finance. "Laundered money either converts to cryptocurrency through mules or blends with legitimate traders' transactions," the study notes, highlighting the urgent need for regulatory intervention.