299 entities face charge sheet as India’s ED cracks down on cryptocurrency scam
The Enforcement Directorate (ED) has taken a significant step in its ongoing investigation into a cryptocurrency scam by filing a charge sheet against 299 entities, including individuals of Chinese origin, under the anti-money laundering law.
In an official announcement, the ED revealed that the charge sheet was filed after a special court in Dimapur, Nagaland, acknowledged the prosecution complaint under the Prevention of Money Laundering Act (PMLA). The charge sheet, which includes 76 entities controlled by Chinese nationals, names 10 directors of Chinese descent and two entities managed by individuals from other countries.
The ED’s action is based on a First Information Report (FIR) by the Cyber Crimes Unit of Kohima Police, which implicated various individuals in a scheme that promised significant returns through cryptocurrency mining. The scammers used a mobile application called “HPZ Token” to deceive investors.
Further investigations uncovered the establishment of bank accounts and merchant IDs by “shell entities” with “dummy” directors, which were used to layer criminally obtained funds. These funds were acquired through illicit online gaming, betting, and investments in Bitcoin mining, with investors being duped by promises of high returns.
Specifically, investors were told that an investment of INR 57,000 (approx. $688) would yield daily returns of INR 4,000 (approx. $48.27) over three months, but this promise was not fulfilled after the initial payment. The ED’s nationwide search has resulted in the seizure of assets and deposits worth INR 455 crore, approximately USD 546 million.
In addition to the ongoing investigation, the ED is scrutinizing nine overseas companies for their involvement in laundering funds from a Bitcoin-based Ponzi scheme operated by Variable Tech Pte Ltd, based in Singapore. This scheme collected 80,000 bitcoins by deceiving investors with promises of high returns, with INR 6,606 crore diverted for foreign property purchases through the companies under investigation.
The companies implicated in the alleged laundering are located in Hong Kong, Dubai, and Estonia, and include notable names such as Amaze Mining Blockchain Research Ltd and Crypto Capital, Estonia. This investigation is part of the Indian government’s broader efforts to regulate the cryptocurrency market, following actions taken against Binance and other offshore exchanges for non-compliance with anti-money laundering policies.
In December, compliance notices were issued to several exchanges, including Binance, KuCoin, and Huobi, by India’s Financial Intelligence Unit (FIU). The FIU is taking steps to protect local investors from these non-compliant platforms, in accordance with the Prevention of Money Laundering Act (PMLA), as part of a concerted effort to combat illegal activities in the cryptocurrency space.
