AI-Powered Crypto Scam Dupes Kerala Investors of ₹3,000 Crore
• Deepfake Deception: How AI Fueled Kerala’s Biggest Crypto Fraud
• Ponzi 2.0: AI and Crypto Combine to Rob Thousands
• Crypto Ponzi Schemes Scam Rs 3,000 Crore in Northern Kerala
Nirmal Jose
Sprouts News Network
Malappuram, Kozhikode, Kannur, Kasaragod, Wayanad – A massive cryptocurrency Ponzi scheme has defrauded thousands of families across the northern districts of Kerala, siphoning off Rs 3,000 crore through artificial intelligence-driven scams. Fraudsters lured victims with promises of high, guaranteed returns and leveraged AI technology to create deepfake videos and clone voices of well-known business figures, misleading investors into parting with their hard-earned money.
• AI-Powered Deception
Victims were enticed by fraudulent trading platforms such as Xellar FX and Untrade (Robotic Trade), which falsely claimed to use AI to generate lucrative investment returns. Investors, many of whom lacked financial expertise, were led to believe that AI-driven bots could trade on their behalf, ensuring exponential growth with minimal risk.
Shaji Naha, a victim from Malappuram, recounted how scammers used AI to clone the voices of Anil Ambani, N.R. Narayana Murthy, and Elon Musk, creating fake videos and manipulated images to bolster their credibility. The deception extended further, with victims receiving calls from a supposed Porinju Veliyath, a well-known investor in Kerala, vouching for the schemes—only to later discover that it was a scammer using AI-generated voice cloning technology.
• A Network of Lies and False Promises
Many victims, including Pathrose, Sunitha, and Arattannan from Kannur, lamented that they were assured of sky-high profits through AI-powered crypto trading. They ignored the classic red flags of financial fraud: guaranteed high returns with little to no risk.
Roy Kannamoola from Wayanad admitted that he was duped into believing that the platforms were legitimate. “We were tricked into transferring our money, often in cryptocurrency, with no oversight or regulatory protection,” he said.
The fraudsters exploited social media platforms and instant messaging apps to spread their false narratives, making it difficult for authorities to track their activities in real-time. Sprouts News has learned that many victims were targeted through private WhatsApp groups and Telegram channels, where scammers built trust by showcasing fake testimonials and manipulated profit charts.
• Ponzi and Pyramid Schemes Run Amok
Authorities confirm that the fraud operated as a Ponzi scheme, where new investments were used to pay returns to earlier investors. In areas like Koduvalli, Tirur, Kanhangad, and Malappuram, early investors received payouts, reinforcing trust in the fraudulent system—until it eventually collapsed.
Meanwhile, pyramid schemes thrived in Kalpetta and Sultan Bathery, where investors were encouraged to recruit others, earning commissions for bringing in new participants. The moment recruitment slowed down, the entire structure crumbled, leaving thousands in financial ruin.
Despite the scale of the scam, many victims are hesitant to approach the police, fearing stigma or believing that their lost money cannot be recovered. According to sources who spoke to Sprouts News, law enforcement agencies are yet to take decisive action against the masterminds behind the fraud, allowing such schemes to resurface under different names.
• False Trust in Big Names and Established Funds
Surprisingly, even college professors from a prestigious business school in Kozhikode fell prey to the scam, proving that financial fraud can target even the well-educated.
Some victims believed they were investing through established hedge funds, only to realize too late that they had trusted names and institutions without questioning the legitimacy of the schemes. “Impulse and intuition, driven by emotion, led to irrational decisions,” explained Dr. Jishad from a prominent hospital in Irinjalakuda, who himself was scammed.
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• Legal Experts and Police Weigh In
Advocate Mirza Saheer, director of Samzin Smart Strategies, a legal-tech firm in Kochi, pointed out the recurring nature of such scams. “What’s remarkable about Ponzi’s legacy is that no matter how many times investors lose money, new schemes keep emerging. Greedy, naïve people of all sorts line up to throw good money after bad,” he remarked.
Authorities have urged victims to come forward, but the police maintain that investors must take responsibility for understanding the risks before committing their money. Sprouts News reached out to law enforcement officials, who stated that while efforts are being made to track down the scammers, the anonymity of cryptocurrency transactions makes it a challenging task.
• Lessons from a Rs 3,000 Crore Disaster
Financial experts warn that such AI-driven scams will only increase in sophistication. The golden rule remains unchanged: if an investment opportunity sounds too good to be true, it probably is.
Victims now face the painful realization that unverified AI trading platforms and promises of effortless wealth are nothing more than elaborate traps. As legal battles loom and investigators attempt to trace the vanished funds, thousands of families across Kerala are left grappling with their losses—reminders of a fraud that exploited both technology and trust.