Nithin Kamath warns of explosion of fake apps that mimic broker interfaces, promise easy trading profits

Zerodha's Nithin Kamath also gave a quick breakdown of the process employed by these scamsters

Zerodha's co-founder Nithin Kamath has warned about the explosion of fake apps that mimic leading broker interfaces and sell the dream of easy money, only to then vanish into thin air.

In a post on social media platform X, Kamath wrote that they even fool "smart", "sensible" people.

Sharing a video on such scams, Kamath wrote, "Fake trading app scams have exploded and have become a mega nuisance."

He added, "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 major brokers".

Also read: Govt fines Zerodha Asset Management, founder Nithin Kamath over CFO appointment delay, firm to contest order

Explaining their strategy, Kamath said, in the first couple of trades, these apps let you make money. This is designed to convince you that you can make a lot of money.

Then, they will ask you to transfer money to trade.

Finally, when you try to withdraw your 'profits', these app operators ask you to make an upfront payment--to cover the fees, taxes and so on--and then the entire group and the people in it vanish.

Kamath warned, "Always remember, if something is too good to be true, it almost always is. It's important to be skeptical about claims of easy money."

One person who commented under his post said that a person known to the user was scammed of Rs 10 lakh and another person was scammed of Rs 50 lakh in the same manner.

Another X user commented below that we should not ignore the "connivance" of bank managers in running such scams. The user pointed out that they allow many fraud accounts to be opened using the Know Your Customer (KYC) details of unsuspecting people or people who need the money (and therefore sell their KYC details). These fraud accounts are then used to hold the money made from such scams.