Farmers' Stolen Identities Fuel $19M Crypto Fraud in India

India’s Income Tax Department has uncovered a $19.31 million cryptocurrency fraud scheme targeting farmers and low-income individuals in the southern states of Telangana and Andhra Pradesh, according to an investigation by the Central Board of Direct Taxes (CBDT). The scheme involved the theft of personal identities, including Permanent Account Numbers (PANs), to conduct high-value crypto trades without the victims’ knowledge. Nine confirmed cases have been verified, with investigators identifying over $19 million in illicit transactions linked to unsuspecting citizens, including farmers and delivery workers, who had no involvement in the activities India’s IT Department Uncovers $19M Crypto Fraud Targeting Farmers^[1].

The fraudsters exploited non-filers of income tax returns, whose identities were used to circumvent standard tax monitoring systems. In one case, a farmer was falsely linked to a $9.5 million cryptocurrency purchase, while another food delivery worker was shown to have executed massive trades despite having no familiarity with crypto. Victims expressed shock upon being approached by officials, with many stating they had never heard of Bitcoin and were unaware their IDs had been misused India’s IT Department Uncovers $19M Crypto Fraud Targeting Farmers^[1].

The investigation revealed that the scheme operated through spoofed PAN cards and falsified personal details, enabling fraudsters to avoid detection. The misuse of non-filers’ identities highlights vulnerabilities in India’s regulatory framework for crypto transactions, which lacks comprehensive oversight. The case has raised concerns about cybersecurity, identity theft, and the need for stricter regulations in a rapidly expanding crypto market India’s IT Department Uncovers $19M Crypto Fraud Targeting Farmers^[1].

In response to rising crypto-related crimes, the Reserve Bank of India (RBI) has introduced stringent digital payment authentication rules effective April 2026. The guidelines mandate dynamic authentication for all digital transactions, requiring one-time passwords, biometric data, or hardware tokens unique to each transaction. These measures aim to prevent reuse of credentials and enhance security for cross-border payments, with issuers held accountable for losses due to non-compliance India Cracks Down on ‘Alarming’ Digital Payments Fraud With…^[2].

India’s growing crypto adoption, which topped the 2025 Chainalysis Global Crypto Adoption Index, has coincided with a surge in fraud cases. In August 2025, the Enforcement Directorate (ED) raided 11 locations in Delhi and other cities, probing a $29 million Bitcoin scam involving phishing and fake tech support. Separately, the ED froze assets linked to Chirag Tomar, a U.S.-jailed fraudster who used spoofed Coinbase websites to steal $20 million in crypto India Freezes Assets Linked to Man Jailed in US…^[3].

The government’s fragmented approach to crypto regulation—prioritizing taxation over a comprehensive legal framework—has drawn criticism. A September 2025 government document stated that India will not pursue a full crypto law but will maintain oversight through tax compliance and anti-money laundering measures. Authorities have warned of risks from speculative trading and stablecoins, which could disrupt the payments system despite India’s $4.5 billion in estimated digital assets held by citizens India Cracks Down on ‘Alarming’ Digital Payments Fraud With…^[2].

Ongoing efforts by agencies like the ED and CBI underscore the scale of the challenge. In February 2025, the CBI raided 60 locations tied to the GainBitcoin Ponzi scheme, while the ED traced a $600 million crypto conversion case involving spoofed websites. These actions signal a coordinated push to dismantle fraudulent networks, though experts caution that systemic gaps in identity verification and cross-border transaction monitoring remain critical vulnerabilities ED, CBI Begin Crackdown As India Sees Surge In…^[4].