India’s financial watchdogs seize over $30m in crackdown on crypto fraud 

India’s Enforcement Directorate (ED) has busted two major crypto scams operating in the country that were duping investors by promising huge returns.

ED managed to seize a staggering amount of cryptocurrency worth INR 90 Crores (approximately $10.7 million), dealing a serious blow to the ‘E-Nugget’ scam.

ED, Kolkata, led a successful operation against a major “online gaming app scam” known as “E-Nugget”. The E-Nugget application, disguised as a gaming platform, promised users high returns on their investments. Crypto assets taken over by ED…

— ED (@dir_ed) 30 April 2024

Two accused, Aamir Khan and Romanian Agarwal, were arrested and charged in the case.

According to an FIR lodged at Park Street Police Station in Kolkata, the scam operated as a gaming platform that rewarded users with high returns on their investment. However, after the investments were made, the application went offline and it was not possible for investors to get their funds back.

A previous investigation by the ED revealed the fraudsters carried out the scheme using 2,500 fake bank accounts. It was also discovered that some of the funds were invested in cryptocurrencies.

“Information collected from Binance and other exchanges led to the freezing of funds worth around Rs 90 crore in 70 accounts held in Binance, ZebPay and WazirX holding funds and linked to the fraud,” ED said.

In total, the ED seized assets worth INR 163 billion (about $19 million) consisting of cash, cryptocurrencies, bank account balances and some offices.

Meanwhile, the Central Bureau of Investigation (CBI) in India has conducted a nationwide investigation into a fake cryptocurrency mining scam. The CBI has filed a case under the country’s Information Technology Act, 2000 against two companies, Shigoo Technology Private Limited and Lillian Technocab Private Limited, in connection with the HPZ token application.

The app masquerades as a cryptocurrency mining platform that offers investment opportunities and promises lucrative returns. Scammers tricked victims into believing they were investing in renting crypto mining hardware for Bitcoin and other currencies.

150 bank accounts were used to raise funds from investors. The operation was similar to other Ponzi schemes; The defendant was sending money from a victim as payment to newcomers to build trust.

The illicit funds were then moved out of India using cryptocurrencies.

ED had earlier seized assets worth Rs 176.67 crore (approximately $21 million) related to this scam.

The crackdown is part of the country’s broader agenda to tightly monitor the cryptocurrency space. The country’s Financial Intelligence Unit (FIU) has expressed concerns about the potential misuse of cryptocurrency exchanges for money laundering. Therefore, cryptocurrency service providers in the country are required to register with the Financial Intelligence Unit-India and comply with the Prevention of Money Laundering Act (PMLA), 2002.