 "Crypto Crimes: Inside India’s best-kept secret")
Crypto Crimes: Inside India’s best-kept secret
Author: Mitali Mukherjee
Publisher: HarperCollins
Pages: 336
Price: Rs 499
This book uses a nice mix of anecdotes plus data to look at the dark underbelly of Digital India. It goes on to examine demographic and sociological trends that drive India’s fascination with the related areas of cryptocurrency, crimes involving crypto, and the deep Dark Web.
The book also takes a mildly haphazard look at the policy space. The fact that the policy description is mildly haphazard is not the author’s fault. She’s done a good job in imposing some degree of coherence in her description of a policy environment that is actually very haphazard and chaotic.
There’s a lot to unpack here so I will attempt to summarise what the reader will learn. One, as India has digitised, and created a structure for smooth electronic transfers of cash, it has become increasingly vulnerable to “faceless” cyber-scams.
It has a large population of elderly non-tech savvy folks, who are shaky when it comes to digital security. It has corporations and government organisations that are casual about data security. It has been late in legislating laws to safeguard data privacy, and those laws have grey areas. People in law enforcement struggle to understand data security and cybercrime. The ambiguous policy attitude about crypto makes it even harder to police.
Second, India also has a huge population of young, tech-savvy, unemployed people with access to smartphones and cheap data plans. It is easy for them to create, or to get sucked into get-rich-quick schemes. They naturally gravitate to crypto, and they’re amoral when it comes to shady practices since in many cases, they’re driven by desperate need. Unemployment, demonetisation, and the pandemic have all helped to turbocharge the move into crypto.
Third, India has a large diaspora with a constant flow of inward and outwards remittances. It is much easier, quicker and cheaper to do transfers under the radar using crypto. This means a wider acceptance of crypto even among people who are otherwise techno-conservative.
There’s a lot of masala in the book centred on young men (there is a gender skew in the space, though there are plenty of women traders) who have pulled off spectacular scams and hacks in the cyber realm. There’s plenty of entertaining characters portrayed in these tales of skulduggery. Those are the anecdotes.
Hacking crypto wallets is one favourite game. Another route to quick money is the “rug pull” — this is the launch of new crypto coins, sales of which are followed up by disappearances, or by the coin dropping to zero. Setting up fraudulent exchanges (where one can list newly dreamt up coins) is a scale-up of this concept. Another popular scam is the offering of absurdly high returns in variations of Ponzi schemes involving crypto.
A fourth growth area is ransomware — all sorts of desi firms and institutions have been hacked with the data encrypted and decryption keys being made available on payment in crypto, of course. Selling data on the Dark Web, including readymade Know Your Customer (KYC) kits that enable people to set up fake accounts, is another popular pastime. Drug deals done via the Dark Web is another target of opportunity. There are dark rumours in government circles of terror funding through this route.
In addition to all this, there is the practice of cross-border transfers using crypto. Some of this activity is attached to money-laundering and round-tripping. But a lot of the cross-border transfers consist of migrant workers sending small sums — $200 or $500 equivalent — home to families through the quickest, cheapest route.
At various times, the Reserve Bank of India has tried to cut off the bank financing of crypto trading but the Supreme Court stopped that. The Securities and Exchange Board of India doesn’t like cryptos either but it doesn’t have a framework for regulating either coins or crypto-exchanges. The government can’t decide how to classify these assets, but by imposing taxes it has effectively legitimised them.
In the midst of all this, there are millions of Indians, maybe a hundred million Indians, regularly dabbling in crypto trading. Small towns and semi-rural geographies are deeply penetrated by crypto culture. Many of these traders also surf the Dark Web. Some host websites there. According to one statistic cited in the book, about 26 per cent of Dark Web users are Indians. A large proportion of Dark Web users do normal stuff — chat, play games, and so on in an environment where they are not under surveillance by nanny states, or policed by their parents.
But a minority are deeply involved in Dark Web markets that are the world’s go-to places for drugs, weapons, malicious code, porn, and pirated content and data. Every Dark Web transaction involves the use of crypto currency, so practically anyone who uses the Dark Web has a crypto-trading profile.
This is a meticulously researched, well-written book that lays out the state-of-the-art across these connected spaces. It sources and cites data from multiple places. The author also conducted extended interviews of entrepreneurs (legit and criminal), law enforcement personnel, and influencers. The book explicates the ecosystem and presents the varying perspectives of people who operate in this environment without being judgmental. It is as good an overview of India’s love affair with crypto as you will find.
