Crypto fraud in India has surged sharply. A government report released in January 2026 said the country logged more than 11,700 reports of suspicious crypto activity in the first eight months of the current fiscal year, up from about 1,300 cases in 2024. That is a 773% increase.
The rise is hitting retail users rather than only large holders. India has about 34 million digital asset holders with roughly ₹24,800 crore in crypto assets, and 82% of all victims are between 20 and 40 years old, according to the report.
A Bengaluru developer case led to a ₹368 crore crypto theft
In Bellandur, Bengaluru’s tech district, a 30-year-old developer was drawn into a fake freelance arrangement that later opened the door to a major theft. The Hindu reported that a recruiter using the name “Sarah Ferguson” contacted him through a professional networking platform and spent one year building trust by assigning real work and paying him a total of ₹15 lakh.
In July 2025, the contact sent what appeared to be a routine update file. Once the developer opened it on his work laptop, attackers used his administrative access to reach the company’s servers and treasury systems. Within hours, they moved ₹368 crore in crypto assets and disappeared.
Cambodia-linked networks and USDT’s large share
The report says the fraud wave is tied to larger international networks, with many operations traced to Cambodia. These groups reportedly use Cambodian phone numbers to run their outreach, while Tether (USDT) accounts for 76% of all crypto fraud activity recorded in India.
Funds are often laundered through services including Huione Pay. The source describes some Southeast Asian hubs as scam factories and says forced labor is used in certain operations to lure Indian victims into fake investment schemes.
Regional concentration and offshore platform blind spots
Data cited from Hindustan Times shows the highest shares of suspicious transaction reports came from Rajasthan at 18%, Uttar Pradesh at 11%, Maharashtra at 7%, West Bengal at 7%, and Madhya Pradesh at 6%. The activity is spread across several states rather than one isolated cluster.
Authorities have responded by blocking websites and imposing multimillion-rupee penalties on companies, but enforcement remains difficult. One key reason is that 41% of Indian investors use offshore platforms, leaving local authorities with limited visibility until after funds have already been moved.