Stock market fraud: Bengaluru man loses ₹91 lakh to fake trading app; here’s what Zerodha’s Nithin Kamath has to say | Stock Market News
Source: Live Mint
Nithin Kamath, co-founder and CEO of Zerodha, has raised concerns about a surge in cyber frauds targeting investors through fake trading apps. His cautionary message comes after a Bengaluru tech professional lost nearly ₹91 lakh in a recent scam.
Addressing the growing threat, Zerodha CEO Nithin Kamath, revealed that scammers have siphoned off over ₹1,100 crore in the past nine months. “Fake trading app scams have exploded and have become a mega nuisance. These scams work by inducing you to trade and making you think that making money is easy,” he wrote on X (formerly known as Twitter).
How the scams operate
Scammers typically begin by adding victims to WhatsApp groups, introducing them to fraudulent apps that closely mimic legitimate brokerage platforms. Users are initially lured with small profits to gain trust, eventually leading them to invest larger sums. Kamath noted, “You are asked to install fake trading apps that look exactly like those of major brokers. On the first couple of trades, you will make money. This is designed to convince you that you can make a lot of money.”
Trail of financial losses
The fallout from these scams has left hundreds across India financially devastated. A Delhi resident recently lost ₹1.15 crore in a similar scheme. In April, a businessman in Bengaluru’s Jayanagar neighbourhood was conned out of ₹5.2 crore after being tricked into downloading a fraudulent app. Another incident in March saw a Pune woman lose ₹24.12 lakh after selling her jewellery to invest in a “get-rich-quick” scheme, as per various media reports.
Kamath’s Advice to Investors
Kamath has emphasized the importance of vigilance and awareness in preventing such fraud. He has urged investors to verify the authenticity of trading platforms before investing and underlined the need for public education on financial scams.
