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29 Oct 2018


A cryptocurrency user from India has almost lost two Bit-coins on Local Bitcoins. The attacker reportedly used sophisticated methods such as SMS spoofing, evidence tampering, and downright lying to the admins of Local bit-coins to facilitate the crime.

The recent banking restriction on cryptocurrencies in India has resulted in individuals using peer-to-peer [P2P] exchange platforms such as Local Bit-coins. The exchange platform is one of the widely accepted P2P Bit-coin exchanges in the world.

According to the post on Coin Crunch, Arun, a frequent trader on the Local Bit-coin platform, placed an advertisement to sell two Bit-coins, worth about $13,000 [9.5 lakh INR]. Furthermore, Arun could not cancel the trade request as it is a standard protocol that when a buyer opens a trade request, the seller is not able to cancel the trade.

Arun had asked for a valid proof from the buyer and soon realized that the buyer’s IP address was clearly showing Indonesia, whereas his phone number was verified to be from Canada. In addition, the buyer had an Indian Passport as an ID Proof. “Shamin Ahmad” from Utter Pradesh as described in the passport.

After verification of the buyer, despite the faulty claims, Arun asked the buyer to transfer the amount to his bank account as soon as possible. At this point, the buyer claimed to have already transferred the money and sent Arun a fake screenshot of around INR 8 lakh transferred from PayTM Savings Bank to the Axis Bank account of Suman Swami, who is not at all in relation to Arun.

The buyer had reportedly raised a complaint with Local Bitcoins claiming that Arun had not sent the two Bit-coins, in spite of him transferring the money. Since Arun did not get the payment, he did not confirm the details and this gave an opportunity to the buyer and seller to raise a dispute on Local Bit-coin.

The scammer also narrated a fake story of an Over-The-Counter deal made by Suman, who according to the scammer was the individual who was selling the Bit-coins. The report revealed that the scammer also shared his SMS conversation records and a video of them messaging each other on the smartphone. The report added that the scammer was able to use a technique called Spoofing, which enabled him to have a chat with Arun’s number without his knowledge about it.

Arun realized that the phone number in the SMS records shown by the scammer was only similar to his number and had a misplaced incorrect digit. Arun soon reported this to Local Bit-coins and confronted the hacker, after which the scammer canceled the trading request and apologized to Arun.

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