Indian financial crime authorities uncover crypto asset scam organization… expand money-laundering investigation

Indian financial crime authorities are expanding an investigation into large-scale fraud and suspected money laundering using fake crypto asset investment platforms. The Enforcement Directorate (ED) said it uncovered an organized crypto asset scam network through simultaneous raids across several states.

According to Cryptopolitan on the 24th (local time), the Enforcement Directorate searched a total of 21 locations, including residences and offices, across Karnataka, Maharashtra and New Delhi. The action is part of a probe under the Prevention of Money Laundering Act (PMLA), and a case was registered against 4th Bloc Consultants and related individuals.

The Enforcement Directorate said the investigation began based on a First Information Report (FIR) and intelligence materials shared by the Karnataka police. Authorities have characterized the group as an organized financial fraud syndicate operating for years and say it ran fake crypto asset investment sites designed to resemble real exchanges.

The platforms in question promised abnormally high returns and are reported to have attracted not only domestic investors in India but also foreign investors. Initially they paid small returns to build trust and then induced larger investments, and there are indications they used photos of celebrities and so-called crypto experts without permission to boost credibility.

The ED said the methods were similar to pyramid schemes and the so-called 'pig butchering' scams. The fraud network promoted itself using social media such as Facebook, Instagram, WhatsApp, and Telegram, and is said to have expanded its pool of investors by offering referral bonuses.

In the money laundering process, transactions using crypto wallets, peer-to-peer (P2P) transfers, paper companies, overseas bank accounts and hawala channels were reportedly used. Some funds were liquidated or deposited into bank accounts, and some were used again for crypto asset trading.

Authorities believe the fraud network has been active since at least 2015, and no arrests have been announced so far. ED made public several websites suspected of involvement in the fraud, including GoldBooker.com, CryptoBright.com, HawkChain.com, QubyGains.com and BitMinerClub.com, and advised investors to stop using them immediately. Meanwhile, digital assets are not recognized as legal tender in India.