In a significant development in the fight against cryptocurrency-related fraud, India’s Enforcement Directorate (ED) has filed a charge sheet against 299 entities, including individuals of Chinese origin, under the anti-money laundering law. This action stems from allegations of duping investors through a cryptocurrency scam, including promises of returns through Bitcoin mining.
The charge sheet, filed in the special court in Dimapur, Nagaland, follows an investigation into a scheme that purportedly offered significant returns through cryptocurrency mining, particularly Bitcoin. The ED’s move comes after an FIR by the Cyber Crimes Unit of Kohima Police, which uncovered fraudulent activities carried out via a mobile application called “HPZ Token.”
Among the entities named in the charge sheet, 76 are under the control of Chinese nationals, with 10 directors of Chinese descent and two entities managed by nationals from other countries. The investigation revealed the use of shell entities and dummy directors to establish bank accounts and merchant IDs for the laundering of criminally obtained funds.
Investors were allegedly deceived with promises of high returns, with an initial investment of INR 57,000 purportedly yielding daily returns of INR 4,000 over three months. However, these promises were left unfulfilled after the initial payment, leading to substantial losses for investors.
The nationwide investigation by the ED has resulted in the seizure of assets and deposits valued at approximately INR 455 crore, equivalent to USD 546 million. Additionally, the ED is scrutinizing nine overseas companies for their involvement in laundering funds from a Bitcoin-based Ponzi scheme operated by Variable Tech Pte Ltd, based in Singapore.
These overseas companies, located in Hong Kong, Dubai, and Estonia, allegedly played a role in diverting funds for foreign property purchases. Notable names among these companies include Amaze Mining Blockchain Research Ltd and Crypto Capital, Estonia. The probe is part of a broader effort by the Indian government to regulate the cryptocurrency market and protect investors from fraudulent schemes.
In December, India’s Financial Intelligence Unit issued compliance notices to several exchanges, including Binance, KuCoin, and Huobi, for non-compliance with anti-money laundering policies. This concerted effort underscores the government’s commitment to curbing illegal activities in the cryptocurrency space and ensuring the integrity of the financial system.
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