India’s Enforcement Directorate (ED) has taken decisive action against two major crypto scams in the country that have defrauded investors with promises of high returns.
In a significant development, the ED has seized a whopping INR 90 crores (approximately $10.7 million) worth of cryptocurrencies, dealing a serious blow to the ‘E-Nugget’ scam. The culprits behind the scam, Aamir Khan and Romen Agarwal, have been apprehended and charged in connection with the case.
The scam, which masqueraded as a gaming platform, enticed users with the prospect of substantial returns on their investments. However, once the investments were made, the app abruptly went offline, leaving investors unable to recover their funds.
An initial probe by the ED unveiled that the scammers operated the scheme through 2,500 dummy bank accounts and diverted a portion of the funds into cryptocurrencies. Through collaborative efforts with exchanges like Binance, ZebPay, and WazirX, the ED managed to freeze funds amounting to nearly ₹ 90 crore across 70 accounts associated with the scam.
In total, the ED has confiscated assets valued at INR 163 crore (approximately $19 million), which include cash, cryptocurrencies, bank balances, and office premises. Meanwhile, the Central Bureau of Investigation (CBI) in India has conducted a nationwide sweep in connection with a counterfeit cryptocurrency mining scam. The CBI has initiated an investigation under the Information Technology Act, 2000, against Shigoo Technology Private Limited and Lillian Technocab Private Limited regarding the HPZ token app.
This app, posing as a cryptocurrency mining platform, lured investors with investment opportunities and promises of lucrative returns. The perpetrators duped victims into believing they were investing in crypto-mining hardware rentals for various digital currencies.
The scam involved the operation of 150 bank accounts to collect funds from investors, following a Ponzi scheme model where funds from one victim were used to pay out new investors to build credibility. Subsequently, the illicit funds were transferred out of India using cryptocurrencies.
Earlier, the ED had confiscated assets related to this scam worth INR 176.67 crores (approximately $21 million). These crackdowns are part of India’s broader efforts to intensively monitor the cryptocurrency sector. The country’s Financial Intelligence Unit (FIU) has expressed concerns about potential money laundering through cryptocurrency exchanges, mandating registration with FIU-India and compliance with the Prevention of Money Laundering Act (PMLA), 2002.
In a separate development, a survey has revealed that Indians are now incorporating cryptocurrencies into their retirement plans, highlighting the growing interest and participation in the digital asset space.