Retail Investors Taking Interest in Cryptocurrencies, Market Volatility, Fraud Risks Increased

Retail investors’ interest in cryptocurrencies has increased in the last few years. However, volatility and scam cases in this segment have also increased the risks for these investors. In the last few months, cases of scams related to crypto have increased rapidly and investors and firms associated with this segment have suffered huge losses.

A report issued by the board of the International Organization of Securities Commissions (IOSCO) states that in 2022 crypto Even though the valuation of the segment is less than one trillion dollars, the interest of retail investors in this segment remains intact. This trend is visible in developed countries as well as emerging markets. This report states that the major source of information related to investment for young retail investors is non-authorized and dubious sources. There is a possibility of financial loss due to this.

To curb cases of fraud in the crypto segment, the United Nations Office on Drugs and Crime (UNODC) has suggested imposing penalties on unlicensed crypto firms. UNODC estimates that crypto-related scams caused losses of approximately $37 billion in Southeast Asia last year. Social media is also used in these scams. UNODC has advised the governments of Southeast Asian countries to be more vigilant and take measures to prevent cases of crypto-related fraud. Recently, the Delhi High Court had ordered the Ministry of Communications to remove 38 websites imitating a crypto firm. Crypto firm Mudrex had filed a petition in the High Court demanding action against fake websites. Mudrex users had reported being scammed through these websites.

In an order published on the Delhi High Court portal on August 23, Justice Mini Pushkarna had asked the Ministry of Communications to remove these websites. Mudrex had given evidence of fake websites using its name and other marks to trap users. It was told in this petition that Mudrex has received complaints from many people who were victims of these scams. In this petition it was said that many customers have become victims of these fake websites and have suffered huge losses.