Zerodha CEO Nithin Kamath Warns Of A New Trading App Scam

Zerodha co-founder Nithin Kamath has raised concerns on X about the rapid rise of fake trading apps that lure users with the promise of easy profits, only to disappear with their money. 

Kamath explained that these scams have become a major nuisance and typically begin with victims being added to WhatsApp groups where they are persuaded to install apps by mimics appearing as legitimate brokers.

“These fake trading app scams have exploded and have become a mega nuisance,” Kamath wrote on X.

Kamath explained that these apps lure users with the promise of easy money. Once convinced, users are asked to invest more funds, but when they try to withdraw their profits, they are asked to pay upfront fees, and the scammers disappear with the invested money. 

Kamath advised being sceptical of claims of easy money.

Kamath was talking in the context of the rise of trading scams in India. Recently, a man from Mumbai lost ₹90 lakh after getting involved in a scam through a WhatsApp group promising stock trading tips. The scammers posed as "foreign experts," convinced the victim to deposit ₹90 lakh into a broker's account, and faked a virtual profit of ₹15.69 crore. 

When the victim tried to withdraw the funds, the scammers blocked the transaction and demanded an additional ₹1.45 crore as a "Profit Sharing" fee.

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. So first, you are added to WhatsApp groups and then asked to install fake trading apps that look exactly like those of… pic.twitter.com/3CXHVq3Hj0

— Nithin Kamath (@Nithin0dha) August 26, 2024

Social Media Reaction:

Online users resonated with Kamath's warning and added their thoughts and experiences.

One user wrote, "Quick money schemes are often the quickest way to lose it all. Let’s stay vigilant and always double-check before jumping into anything that promises easy gains."

Another user commented, "Thanks for spreading awarness of these scams . I have recd similar in watsup and immediately i have delated . As we all aware no short cuts earning money . Study company profile,market demand of product ,see debt n credit ratios and see past history .have patience for long term."