Block Trading Scams in India

How many of you have come across the term Block Trading? Well, if you an active Telegram & WhatsApp user, you might have come across group claiming block trading facilities. Although block trading does exist in India, only institutional investors are eligible for the same. So, if anyone claims to provide any such investment scheme, stay away; it could be a block trading scam.

Let’s uncover the details and check what block trading is and how scammers are misusing it for their own benefit.

Let’s begin with an understanding of what block trading is.

A block trade or Block Deal is one big transaction done by large entities to move huge amounts of money without letting it affect the market too much.

The transaction is done under SEBI guidelines. However, this is only for institutional investors.

But unawareness and lack of knowledge often make it easier for scammers to mislead retail traders and investors who are looking for a passive income source.

Here are some of the reported cases on Block Trading scams in India.

Scammers stay one step ahead, and in the recent case, a scammer created a WhatsApp group with the name Axis Securities. To make it look authentic, he added a Display Picture of Mr.Atul Mehra (CEO of Axis Capital).

Now, just think who would doubt this group after seeing the image of the CEO of Axis Bank.

In first instance, no one would even doubt.

Now the scammer adds random people to the Group and then:

Emailed fake SEBI-authorization letters to victims.
Shared a fabricated website link with the group members.
Claiming quick profits, members were asked to deposit funds.
To create urgency, such groups often operated by a team where other members of the team behave as users and share screenshots of deposits and fake returns.

But certain signs can make people stop at the first step, right away.

These scammers share their bank details to add funds, but if you are aware, no registered trading platform shares bank details for fund addition.

Infact, for investment & trading purposes on the registered Axis Securities platform, the actual transfer happens in one’s trading account only.

As per the investigations, most of the scammers operate from China.

Block Trading Scams Complaints

There are other complaints where victims have mentioned about fake WhatsApp group and investment schemes where they or their known ones have lost money.

One of the members of the fake group shared his experience, where he mentioned that the Axis Bank fake investment platform is running a fraudulent scheme and how the host removed him after he shared the link in the group to aware awareness about the fraud.

One of the news articles on ‘Times of India,’ an 88-year-old man lost around ₹20 L in the block trading fraud.

The victim was asked to invest in an app through AXIX agency. This is how the scam was operated:

The Axix agency reached out to the victim via WhatsApp message.
Apparently, he was asked to download an app and invest the money in the app.
He was promised high and instant returns.
They slowly gained his trust by giving initial returns.
When asked for withdrawals, the agency demanded deposits(30% of his profits).
The victim grew suspicious. After thorough research, he realized he had been scammed!
He has raised a cybercrime complaint.
The police warn investors of unreliable social media block trading channels, which end up being a scam.

Noida scam: A few months ago, two individuals disguised themselves as SBI staffers and approached a man from Noida. So, what did they promise?

5 to 10% daily profits from block trading and IPO allotments.
This was done via a WhatsApp group named SBI Securities.
The victim was asked to register on a website and provide KYC credentials.
An initial amount of ₹25000 was supposed to be deposited for the service to commence.
The victim sent almost 42 Lakh rupees to different bank accounts.
The website portal showed 3 Crore profits.
When he finally wanted to withdraw, he got 2 Lakh at first.
Then, the website asked him to pay 5% commission before allowing for further withdrawals.

These are some real cases for you to go through. This is how they approach potential investors. All these are red flags and need to be investigated before proceeding further.

How to Identify Block Trading Scams?

Now, these are a few cases of block trading scams, but the real question is how to protect oneself from becoming a victim of this fraud in India.

If you actually care for your money and do not follow quick-rich investment schemes, then you are already safe.

Other than this, here are a few signs that you can check to identify such scams.

If you are added to some random Telegram channels/WhatsApp groups promising exclusive block-deal allocations or guaranteed returns. Stay away.
A group or investment scheme promising guaranteed returns is the biggest red flag.
If the group claims to be a SEBI-registered entity, always verify the details and check the website.
Avoid investing in block trading or IPO using third-party websites.
Exit the group right away if the Admin shares bank details and UPI for fund addition.

To make it simple and clear, a Block deal is a big deal! No pun intended… Only big institutions or entities do block trading, when they buy or sell a bulk of their shares.

How to Report Trading Scam?

If you have added to any of these groups and lost your money in a fake investment scheme, then take action now.

File a Cyber Crime complaint. Share chat history, bank transfer details, etc
Lodge an FIR at the nearest police station.
File a Complaint in SEBI by sending an email about the fraud group running under the name of an SEBI-registered broker or entity.
Inform your bank immediately (raise a dispute, request a stop/recall where possible).

Need Help?

If you have lost your funds in block trading or fake IPO scams, then register with us now. We will guide you with the process to report a complaint online using the right protocol and help you to recover losses.

Conclusion

These Block Trading scams in India are becoming more frequent.

Social media platforms or any other platform are where they begin to lure you into this financial fraud.

If you’re added automatically to any WhatsApp or Telegram group, that’s the first sign. You should be running is the opposite direction from whatever they are advising!