The HiBox app fraud has recently come under intense scrutiny, with reports revealing that more than 30,000 individuals were deceived into investing in the platform, leading to a massive loss of INR 500 crore (approximately $60 million). The scam involved several well-known social media influencers and YouTubers, whose promotional activities lured unsuspecting users into believing the app’s promises of high returns.

https://youtu.be/rjt7PYgb9AI

https://youtu.be/rjt7PYgb9AI

Launched in February 2024, the HiBox app positioned itself as a lucrative investment platform, promising daily returns ranging from 1% to 5%, which could amount to monthly returns of 30% to 90%. Many were attracted by the app’s combination of investment opportunities and trendy features like “mystery box” shopping. However, by July 2024, complaints began to surface as the platform stopped disbursing payments, citing issues such as technical glitches and regulatory troubles.

Key figures in the promotion of this app include YouTuber Elvish Yadav, comedian Bharti Singh, and others like Abhishek Malhan and Lakshay Choudhary. These influencers used their vast social media followings to promote the app, making it seem credible. Their involvement led many to trust the app, unaware that they were being misled.

The scam unfolded when users realized that the promised returns never materialized, prompting Delhi Police’s IFSO unit to launch an investigation. The app’s mastermind, identified as Sivaram, was arrested in October 2024, and the office of HiBox, located in Noida, had already been shut down, with the culprits fleeing.

This case highlights a growing concern regarding social media influencers’ accountability when promoting financial products. It raises important questions about the responsibility of influencers to verify the legitimacy of the products they endorse, especially when financial investments are involved. It also emphasizes the need for regulatory bodies, such as India’s Securities and Exchange Board (SEBI), to tighten control over unregistered financial influencers(finfluencers) who may inadvertently or intentionally promote fraudulent schemes.

Lessons for the Audience

  1. Due Diligence: Before investing in any platform, especially one promoted by influencers, conduct thorough research into the company’s background and financial health. Trust should not be placed solely on an influencer’s endorsement.
  2. Beware of Promises of High Returns: Investments promising unrealistically high returns in a short time often turn out to be scams. The rule of thumb is that the higher the return, the higher the risk.
  3. Understand Influencers’ Motivations: Influencers are often compensated for promoting products, but this does not guarantee the product’s legitimacy. Always seek independent reviews and expert opinions.
  4. Financial Literacy: Consumers should prioritize financial education, understanding the risks and rewards of investments, rather than relying on the word of celebrities or influencers.

This scandal underscores the need for caution when dealing with influencer-promoted financial schemes and highlights the growing risks of social media influence on financial decision-making.