UP Police books Poloniex for deceiving Lucknow journalist of Rs 5.66 Lakh

Cyber crime police of Uttar Pradesh has booked senior officials of a US-based cryptocurrency exchange – Poloniex, for allegedly cheating a Lucknow based journalist of Bitcoins worth Rs 5.66 lakh.

According to the FIR registered by the cyber crime police station, the victim alleged that the international cryptocurrency exchange – Poloniex, intentionally conspired to misuse his Bitcoins which he had purchased from the platform three years ago. The case has once again highlighted the safety of cryptocurrencies like Bitcoins, the operation of crypto exchanges and governments policy in managing such digital assets.

The victim – Deepak Gidwani in his FIR said that after a reference he bought Bitcoins (BTC) worth Rs 50,000 in 2018. But he never accessed his account because he had very little knowledge about the digital assets. It was only in October 2021, while sorting his documents he found credentials of his Bitcoin purchase with Poloniex.

Gidwani said, “I found the login if and password of my account so I thought of checking my balance.  I got excited as the money I invested grew almost by 10 times and now I had Rs 5.66 Lakh in my account. When I tried to withdraw the amount I was informed that no transaction can be done as the account is frozen.”

Freezing an account is a standard protocol followed by most companies if the account is dormant. Gidwani was instructed to send his documents for verification and KYC to re-activate his accounts. On November 2, 2021 he wrote to the crypto exchange to start his account and shockingly it was on the same day all the money was illegally withdrawn from his account. But for the next 27 days, Gidwani was not given access to his account.

After following up emails It was on November 29 he got his account back but he was shocked to find that only Rs 1,500 was left in the account. “How can someone access my account when the account was frozen? How can all the money be withdrawn on the same day I contact customer care for re-activation? The account was secured under two factors (2F) authentication then why didn’t receive any notification?,” questioned Gidwani.

The international crypto-exchange Poloniex did not take any responsibility for the breach and blamed an unidentified hacker behind the illegal transaction.