India’s Enforcement Directorate has cracked down yet another money laundering suspect that is linked to the crypto world. On December 4th, local media reports highlight that the Enforcement Directorate (ED) has taken into custody two chartered accountants and a cryptocurrency trader as part of a money laundering probe connected to a Rs 640 crore ($76.7 million) cyber fraud case.
The crack down on the case comes at a time when the nation’s ED has been very alert and vigilant in terms of curbing illicit activities related to crypto.
What Was The Modus Operandi For the Fraud?
According to a statement from the Delhi Police’s Economic Offences Wing (EOW), the money laundering investigation is the result of two formal complaints (FIRs) that were filed to investigate allegations of cyber fraud totaling Rs 640 crore (nearly $76 million) that was made through gambling, betting, part-time employment, and phishing schemes.
According to the ED, the money of unsuspecting individuals was “siphoned off” by transferring the stolen funds through over 5,000 “mule” Indian bank accounts before being posted on PYYPL, a payment platform based in the United Arab Emirates.
Between November 28 and 30, the ED had searched 13 locations in Indian cities of Delhi, Gurugram, Jodhpur, Jhunjhunu, Hyderabad, Pune, and Kolkata.
ED Keeps Heightened Watch On Crypto Sector
India’s ED has been keeping a strict watch on the crypto sector in order to curb illegal activities that are happening in the sector. Just previously, the Enforcement Directorate had seized additional assets in India and Dubai worth about Rs 106 crore ($12 million) as part of an investigation against Chinese nationals involved in a cryptocurrency scam in the tiny state of Nagaland.
In this case, over Rs 603 crore ($71.4 million) has been seized so far. The defendants, many of whom were Indian nationals, used “HPZ Token” to look for investments in addition to playing games and placing bets online.
India Witnesses Rise In Crypto Scams
Scams are becoming more common in India, with crypto being a center stage for most of the illicit activities. More than $5.6 billion was lost in 2023 due to cryptocurrency-related frauds and scams globally, a 45% increase from 2022.
Just previously in the trading day, the Finance Ministry of India, had uncovered cryptocurrency exchanges that have engaged in substantial tax evasion, evading ₹824.14 crore (roughly $96 million) in Goods and Services Tax (GST).
People’s willingness to invest in riskier assets has increased along with the sophistication of scams. Getting an investor to move their cryptocurrency to a new website where the scammer instills confidence by showing fictitious large returns is one of the most popular scam tactics.