India’s Enforcement Directorate files charge sheets against 299 crypto entities

March 11, 2024

By Anjali Kochhar

The charge sheet follows accusations of investor fraud involving Bitcoin mining and other cryptocurrencies. After the prosecution’s complaint under the Prevention of Money Laundering Act (PMLA) was acknowledged by the special court in Dimapur, Nagaland, this development was formally announced.

According to the local publication report, the charge sheet lists 76 entities managed by Chinese nationals, including 10 directors with Chinese ancestry, and two entities managed by foreign nationals. The Cyber Crimes Unit of Kohima Police filed a First Information Report (FIR) that led to the ED’s action, accusing several people of participating in a cryptocurrency mining scheme that promised large profits. According to the Kohima Police, the con artists tricked investors by using a smartphone app called “HPZ Token.”

Subsequent inquiries uncovered the creation of merchant IDs and bank accounts by “shell entities” with “dummy” directors with the intention of “layering” money obtained through illegal means. The ED claims that the money was obtained by illegal internet gambling, gaming, and Bitcoin mining investments, all of which tricked investors with the promise of large returns.

To be precise, it was promised that an investment of INR 57,000 (roughly $688) would yield daily returns of INR 4,000 (roughly $48.27) over the course of three months; however, this promise remained unfulfilled after the initial payment. The report also stated that assets and deposits worth INR 455 crore, or roughly USD 546 million, had been seized as a result of the ED’s nationwide search.

Nine foreign businesses are also being investigated by the ED for their possible involvement in the money laundering of a Bitcoin-based Ponzi scheme operated by Singapore-based Variable Tech Pte Ltd. Through the use of false promises of high returns, this scheme amassed 80,000 Bitcoins, with INR 6,606 crore being diverted for the purchase of foreign real estate through the investigations’ companies.

India’s Financial Intelligence Unit (FIU) sent compliance notices to multiple exchanges in December, including Binance, KuCoin, and Huobi. In accordance with the Prevention of Money Laundering Act (PMLA), the FIU is taking action to safeguard local investors from these non-compliant platforms, demonstrating a determined attempt to stop illicit activity in the cryptocurrency space.

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.

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