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

India’s Enforcement Directorate (ED) has cracked down on two major crypto scams operating in the nation, duping investors by promising massive returns.

The ED has managed to seize a staggering INR 90 crores (approximately $10.7 million) worth of cryptocurrencies, dealing a severe blow to the ‘E-Nugget’ scam.

Two accused, Aamir Khan and Romen Agarwal, have been arrested and charged in connection with the case. 

According to an FIR filed with the Park Street Police Station of Kolkata, the scam operated as a gaming platform, rewarding users with high returns on their investments. However, once investments were made, the app went offline, and investors had no way to reclaim their funds.

An earlier investigation by the ED revealed the scammers ran the scheme using 2,500 dummy bank accounts. It further discovered that a portion of the funds were invested in cryptocurrencies.

“Information gathered from Binance and other exchanges led to the freezing of funds totalling nearly ₹ 90 crore available in 70 accounts, maintained with Binance, ZebPay and WazirX holding funds, which were linked to the scam,” the ED said.

In total, the ED has seized assets worth INR 163 crore (approximately $19 million) comprising cash, cryptocurrencies, bank account balances, and some offices.

Meanwhile, the Central Bureau of Investigation (CBI) in India has carried out a nationwide search in relation to a fake cryptocurrency mining scam. The CBI has registered a case under the nation’s Information Technology Act, 2000, against two companies, Shigoo Technology Private Limited and Lillian Technocab Private Limited, in connection with the HPZ token app.

The app masqueraded as a cryptocurrency mining platform, offering investment opportunities and promising lucrative returns.  The scammers led the victims to believe they were investing in crypto-mining hardware rentals for Bitcoin and other currencies.

150 bank accounts were used to collect funds from investors. The operation was similar to other Ponzi schemes, with the accused sending funds from one victim as a payout to the newcomers to build trust. 

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

The ED had previously seized assets related to this scam worth INR 176.67 crores (approximately $21 million).

The crackdowns are a part of the nation’s broader agenda to strictly monitor the cryptocurrency space. The nation’s Financial Intelligence Unit (FIU) has raised concerns regarding the potential misuse of cryptocurrency exchange in money laundering. As such, cryptocurrency service providers in the nation are required to register with FIU-India and conform to the Prevention of Money Laundering Act (PMLA), 2002.

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