Fake digital currency apps virtually coining it


TThe advent of digital forex trading has brought with it a new set of challenges. Scammers have started offering fake platforms and often use the brands and logos of well-established, reliable digital currency trading platforms to appear legit. This can be extremely dangerous for both newbies and experienced traders who can transfer their funds to the wrong places.

Recently in the case of Bombinate Technologies Pvt. ltd against KOO Coin and ors.The Delhi High Court issued an injunction against infringers of the KOO trademark and related bird device registered since 2019 and owned by plaintiff Bombinate.

Manisha Singh, LexOrbis
Manisha Sing
partner
LexOrbis

The plaintiff was the owner of the popular Indian multilingual Android-based social media mobile applications Vokal and Koo, which were used as microblogging platforms by more than 10 million users and downloaded from the Google Play Store. They owned the KOO brand, the bird device and the domain name kooapp.com. The brands and the device were taken over by them in 2019. The plaintiff also started a program called Koo Coin as a rewards program for its active users who checked into the app once a day. These coins were redeemable and could be used as cash.

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The plaintiff became aware of several websites created by the defendants for blockchain trading and microblogging. These were www.koo.money, www.minekoo.com, Koo Network and Koo Tweet Social Media. The defendants launched a digital currency called Koo Coin on these websites in 2022. In addition, several Android mobile application package providers provided links to the defendants’ websites. It has also been alleged that the defendants may have conducted fraudulent transactions under the guise of trading digital currencies, thereby deceiving innocent users. The defendants used the plaintiff’s trademarks in these transactions. The overall operation of the website and services was vague due to the unavailability of the details of the people who had registered those domains and the extensive misuse of the plaintiff’s trademark.

Simran Bhullar
Senior Associate
LexOrbis

The lawsuit was directed against the three platforms Koo Coin, Koo Network and Indian Creatives Koo Tweet Social Media as well as the domain name provider GoDaddy LLC. The other defendants were various internet service providers, the government’s Department of Telecommunications and several unidentified and unknown infringers. The plaintiff had also filed complaints with bodies such as the National Cyber ​​Crime Reporting Portal, the Department of Electronics and Information (Department) and the Federal Trade Commission.

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After hearing the plaintiff’s arguments, the court found that the plaintiff was ostensibly the rightful owner of the trademarks in question for the online services on social media platforms. Defendants’ websites are vague and infringe plaintiffs’ trademarks. One of the vague websites claimed to be based in the UK, but the digital money was converted into Indian rupees. Another of the defendants ran a mobile app that had multiple reviews saying it appeared to be fake. Another defendant impersonated a social media platform and operated it under the name Koo.

It was clear that the defendants were abusing the plaintiff’s trademarks to mislead customers by pretending to offer genuine cryptocurrency trading platforms affiliated with the plaintiff. To protect innocent customers from believing the defendants to be real, the court issued the injunction. The ministry decided to block such vague websites and instructed internet service providers (ISP) to do so. Defendants were prohibited from using the trademark or offering to trade digital currencies under the plaintiff’s trademarks. The domain name provider has been ordered to disclose the details of the owners of these duplicate websites. The next hearing will take place on October 6, 2022.

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The court’s order serves the dual purpose of protecting brand owners and customers. The wave of digital currencies is a double-edged sword. It has become an easy cover for financial scammers. Because of the anonymity it offers, identifying the culprits behind the scams is even more difficult. However, a concerted effort by brand owners, government regulators, ISPs, and domain name providers will stop the perpetrators, enforce intellectual property rights, and secure customers’ property and data.

Manisha Singh is a Partner and Simran Bhullar is a Senior Associate at LexOrbis.

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