A COUPLE who planned to retire at 58 with over £70k worth of cryptocurrency have lost it all to evil scammers.
Manu Kundra and his wife Shallu, 49, were devastated when they logged into their cryptocurrency account in May last year to find their retirement savings has been swiped.
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Five risks of crypto investments
THE Sun’s consumer team round up the five major risks of investing in cryptocurrencies:
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
Instead of seeing the £50k they knew was there, they found that only £8.86 was left.
A look at the account’s transaction history revealed more than 50 outgoing payment by scammers ranging from 59p to £12,600.
And now the couple have no way of reclaiming the crypto after their investigation hit a dead end.
“Initially I was going to have to work ’til 58, now I’m going to keep working ’til 65,” Mr Kundra told news.com.au.
And to make matters worse, had the money remained in the account, it would now be worth a whopping £78k.
The dad-of-two opened an account with Independent Reserve, an Australian crypto exchange, in 2017 when the virtual currency was soaring in value.
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Keen to jump on the bandwagon, Mr Kundra invested £23,000 of his savings between February and April 2018, earning 0.25 Bitcoin, 35 Ethereum tokens and 40 Litecoins.
When the market crashed, the Aussie dad stopped trading and decided to leave his investment to sit there.
In 2020, his portfolio started to rise again as cryptos shot up in value and his £23k had grown to £50k by May 2021.
But when Mr Kundra tried to save his cash, he realised he had been scammed.
It turns out hackers broke into his account and changed the passwords and set up a two-factor authentication to lock him out.
He notified Independent Reserve but it was too late, the money had already been funneled out into a foreign Binance account.
A police investigation later found the money was initially transferred to an IP address located in Turkey before being sent to another account in Nigeria where it disappeared for good.
It took me four months to come out of that sort of anxiety
Manu Kundra – crypto scam victim
And New South Wales police say they can’t pursue the investigation any further because the criminals are outside their jurisdiction.
“That was part of my strategy to get money for my retirement,” a devastated Mr Kundra said.
“To earn $150,000 is about $15,000 a month, in just 10 years it’s impossible.”
He’ll now have to keep working for another 17 years instead of 10, which was his original goal.
All the while Mr Kunda is missing out on the opportunity to buy more crypto cheaply.
“With this crypto market booming, you see your money going down every day [by not having any crypto],” he said.
“It took me four months to come out of that sort of anxiety.”
BANKING OUT
To make matters worse, Independent Reserve refused to compensate Mr Kundra, saying they’re not responsible because the breach had come from his end.
But Mr Kundra employed cyber investigators who said they found no signs of any malicious activities on any of his devices.
He later discovered an email address linked to his crypto account had been compromised in a widescale data breach which affect a million others.
His email and phone number had been sold before being dumped publicly in June 2020.
Independent Reserve’s terms and conditions state it’s the customer’s responsibility to protect their credentials.
A spokesperson for the exchange told news.com.au: “At no point has there been any compromise or breach of Independent Reserve‘s systems or data.
“Independent Reserve followed all correct processes and procedures and acted in the client’s best interests at all times.
To earn $150,000 is about $15,000 a month, in just 10 years it’s impossible
Mr Kundra
“IR actively promotes best practice regarding keeping customer accounts safe and secure via regular warnings on its platform as well as publicly available information.”
It comes as a recent study by data firm Chainanalysis found £390 worth of crypto had been stolen from account holders like Mr Kundra in 2021.
It claimed North Korea-affiliated fraudsters had amassed more than £210k.
But crypto is a risky way to invest, and the UK regulator has warned Brits to be wary of how quickly its price can go up and down, as well as the lack of protection if anything goes wrong.
Anyone who does invest in cryptocurrencies should check the firm they are using is registered with the FCA.
Even so, consumers are unlikely to be protected by the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 of your savings if a firm goes bust. You also can’t complain to the Ombudsman.
The FCA says investors should be aware of the complexity of financial products linked to cryptocurrencies, and warns that there is no guarantee your money can be converted back into cash.
