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India Intensifies Action Against Cryptocurrency Frauds with Major Seizures and Arrests
India’s Enforcement Directorate (ED) has escalated its efforts against cryptocurrency fraud, making significant headway in dismantling two sophisticated scams that promised investors substantial returns. The agency has successfully confiscated cryptocurrencies worth an astounding INR 90 crores (about $10.7 million), targeting the operations of the notorious ‘E-Nugget’ scam.
In a key development, individuals Aamir Khan and Romen Agarwal were apprehended and now face charges related to orchestrating this deceptive scheme. The scam, masquerading as a lucrative gaming platform on the Park Street Police Station’s FIR in Kolkata, lured investors with the promise of high yields. Victims found themselves at a loss when the platform abruptly went offline post-investment, blocking any form of fund recovery.
Further investigations led the ED to unearth the operation of 2,500 fictitious bank accounts used to funnel the illicit money, some of which was then channelled into cryptocurrencies. Collaborative efforts with cryptocurrency exchanges like Binance, ZebPay, and WazirX have resulted in the freezing of nearly INR 90 crores across 70 accounts linked directly to the fraudulent activities.
Cumulatively, the ED’s rigorous enforcement has led to the seizure of assets worth INR 163 crores (approximately $19 million), which include cash, cryptocurrency holdings, bank account balances, and even physical office spaces.
Simultaneously, the Central Bureau of Investigation (CBI) is conducting extensive searches across the country in connection with a sham cryptocurrency mining operation. This fraudulent activity was promoted through the HPZ token app by Shigoo Technology Private Limited and Lillian Technocab Private Limited, falling under scrutiny for violating India’s Information Technology Act, 2000. The app deceitfully presented itself as a crypto-mining investment hub, enticing investors with high returns on fictitious crypto-mining equipment rentals.
In a typical Ponzi scheme fashion, the fraudsters recycled money from new investors to pay earlier participants, establishing a false sense of security and trust. The scheme facilitated the collection of funds through 150 bank accounts, eventually leading to the illegal transfer of the accumulated wealth using cryptocurrencies.
Previously, the ED had secured assets worth INR 176.67 crores (around $21 million) connected to this scam. These stringent actions are part of India’s comprehensive strategy to regulate the burgeoning cryptocurrency market rigorously, especially to counteract money laundering. Cryptocurrency service providers are mandated to register with the Financial Intelligence Unit (FIU) of India and adhere strictly to the Prevention of Money Laundering Act (PMLA), 2002, to maintain operational transparency and security.
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