WazirX blocks over 17,000 accounts in 6 months

Cryptocurrency exchange WazirX blocked around 17,218 accounts between October 2021 and March 2021, as per its latest transparency report released on Tuesday. This is a 19 per cent jump in number of accounts blocked compared with the previous six-month period of April-September 2021.

Nearly 40 per cent of these accounts blocked in the recent period were in relation to ponzi schemes and social engineering scams.

Of the numbers recorded in the current report, almost 73 per cent of the blocking requests were from various users and 27 per cent was initiated by WazirX. In terms of requests form Indian and foreign law enforcement agencies to suspend accounts with criminal suspicions, WazirX has complied to 100 per cent of all the 1,023 requests.

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Indian law enforcement agencies accounted for 952 of these requests and rest were from foreign agencies.

Around 40 per cent of the overall accounts blocked fell under the category of ponzi schemes and social engineering scams, 25 per cent were impersonation cheating scams and another 25 per cent phishing/airdrop scams apart from 5 per cent identity theft scams.

“This shows that majority of scams originates from outside the on-chain crypto ecosystem. According to our data, only around 4.5-5 per cent of cases are related to actual blockchain and VDA frauds, which we are assured to address with increased monitoring capabilities. Also, a clear regulatory framework could help with greater detection and resolution,” the company said.

Aritra Sarkhel, Director, Public Policy at WazirX told BusinessLine, “There are no designated law enforcement agencies that keep track of crypto exchanges. But, through our efforts, we have helped National Investigation Agency, Enforcement Directorate, State Cyber Crime Cells, Intelligence Fusion & Strategic Ops (IFSO) Delhi, Special Task Force and Narcotics Control Bureau in the last year with their investigations and legal proceedings.”

“We have a robust process to aid law enforcement agencies. Authorized government official or law enforcement agency, in accordance with law, place written request with our legal team, upon which the email is scrutinized along with details of the complaint, the investigation officer and seal of the agency. Post-confirmation, action is initiated from our end. Individual/users can place requests through our user support channel, which is taken up by our legal team,” he added.

Most of the law enforcement agency requests came for impersonation scams, social engineering scams and identity thefts. Social engineering scams refer to attacks conducted through emails, phone calls and text messages. Under various pretexts ranging from credit card expiry to bank account validation, the scammer tends to flag off a sense of urgency and fear with the aim to push victims to take action without careful assessment.

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