Financial regulators confiscate more than $30 million in crackdown on cryptocurrency fraud.
India’s Vigilant Pursuit of Crypto Scams: Safeguarding Investors and Uncovering Illicit Schemes
In a relentless effort to protect its citizens from financial fraud, India’s Enforcement Directorate (ED) has launched a crackdown on two major cryptocurrency scams that have been operating within the nation’s borders. These scams, preying on unsuspecting investors with promises of massive returns, have faced a significant setback due to the ED’s swift and decisive actions.
The first case, the ‘E-Nugget’ scam, has resulted in the seizure of a staggering INR 90 crores (approximately $10.7 million) worth of cryptocurrencies. Two individuals, Aamir Khan and Romen Agarwal, have been arrested and charged in connection with this elaborate scheme. According to the FIR filed with the Park Street Police Station in Kolkata, the scam operated under the guise of a gaming platform, luring investors with the prospect of high returns on their investments. However, once the investments were made, the app went offline, leaving the victims with no recourse to reclaim their funds.
The ED’s investigation revealed that the scammers had utilized a network of 2,500 dummy bank accounts to facilitate the scheme. Further, the agency discovered that a portion of the illicit funds had been converted into cryptocurrencies, prompting the freezing of funds totaling nearly INR 90 crore, which were held in various cryptocurrency exchanges such as Binance, ZebPay, and WazirX.
In a parallel development, the Central Bureau of Investigation (CBI) in India has conducted a nationwide search in relation to a separate cryptocurrency mining scam. This case involves two companies, Shigoo Technology Private Limited and Lillian Technocab Private Limited, which operated the HPZ token app, masquerading as a cryptocurrency mining platform and offering investment opportunities with the promise of lucrative returns.
The CBI’s investigation revealed that the scammers had utilized 150 bank accounts to collect funds from unsuspecting investors. The modus operandi was similar to a Ponzi scheme, with the accused using funds from new investors to make payouts to earlier participants, thereby building a false sense of trust.
The ED had previously seized assets worth INR 176.67 crores (approximately $21 million) related to this scam, further underscoring the magnitude of the illicit activities.
These crackdowns are part of India’s broader agenda to closely monitor the cryptocurrency landscape and mitigate the potential misuse of cryptocurrency exchanges for money laundering. The nation’s Financial Intelligence Unit (FIU) has raised concerns about the risks associated with the cryptocurrency sector, prompting the implementation of stricter regulations. Cryptocurrency service providers in India are now required to register with FIU-India and comply with the Prevention of Money Laundering Act (PMLA), 2002.
These decisive actions by the Indian authorities send a clear message that the nation is committed to safeguarding its citizens from financial fraud and maintaining the integrity of its financial system. As the cryptocurrency market continues to evolve, India’s proactive approach in combating crypto-related scams serves as a model for other countries to emulate, ensuring the protection of investors and the overall stability of the financial ecosystem.
