Indian authorities launched a major crackdown on what is alleged to be a Ponzi scheme in cryptocurrency that caused estimated losses of around 254 million dollars for investors.
This case highlights a growing global issue. With the rise of cryptocurrency hacks in 2025, fraud is increasing in parallel. Professional malicious actors are exploiting digital asset holders through sophisticated and targeted fraud tactics.
Indian authorities uncover a multi-platform Ponzi scheme involving cryptocurrencies.
The Enforcement Directorate (ED) stated that it conducted searches at eight locations in the northern states of Himachal Pradesh and Punjab on December 13, under the Prevention of Money Laundering Act (PMLA). The investigation pertains to what officials described as a large-scale Ponzi scheme and fraudulent multi-level marketing (MLM) based on digital currencies, which allegedly defrauded hundreds of thousands of investors.
According to the ED, investors lost around 2,300 crore rupees. This is approximately equivalent to 254 million dollars at current exchange rates. The investigation indicated that the scheme was planned by Subhash Sharma, who fled India in 2023.
The press release clarified that "the ED initiated the investigation based on several registered police reports from various police stations in the states of Himachal Pradesh and Punjab against Subhash Sharma, the mastermind of the fraud, and other individuals connected to him, under various provisions of the Indian Penal Code 1860, the Chit Funds Act 1982, the Unregulated Deposit Schemes Act 2019, and related laws". To view the statement, click here.
Investigators accused Sharma and those connected to him of launching and managing their schemes across multiple platforms, including Corvio, Voskro, DGT, Hybenext, and A-Global. They described these platforms as self-made and unregulated systems that operated as classic Ponzi schemes according to the investigations.
Authorities reported that "naive investors were lured in with false promises of extraordinary returns."
The ED also revealed that the accused manipulated the prices of fictitious tokens. They occasionally created, closed, and renamed platforms to conceal the fraud.
Authorities claimed that the proceeds of crime were laundered through cash associations, fictitious entities, and personal bank accounts in the names of the accused and their relatives.
The press release indicated that several individuals acted as commission agents, receiving large sums for bringing new participants into the scheme. The network also faced accusations of using foreign travel incentives and promotional events to expedite investor recruitment and expand operations.
The Enforcement Directorate stated that one of the accused who was arrested (by the Himachal Pradesh Police in 2025), named Vijay Juniga, sold 15 plots of land located in Zirakpur, Punjab, in blatant violation of the law, despite a freezing order issued on 04-11-2023 by the competent authority (based on a state police investigation), which was duly communicated to the Secretary of Finance, the honorable court, and the revenue authorities of the Government of Punjab.
The Enforcement Directorate confirmed after the searches that it froze three vaults and bank balances and fixed deposits totaling approximately 1.2 crore rupees (about $132,000).
The Enforcement Directorate reported that numerous documents were also seized, implicating the accused regarding investments in various real estate properties, including properties in Panama acquired by the accused individuals using proceeds from crime through the Ponzi scheme, along with investor databases, commission structures, and digital devices, indicating a large operation to generate and launder these funds.
Authorities also confirmed that the investigation is still ongoing.
The global pandemic of cryptocurrency fraud is increasing.
The crackdown in India comes amid a global rise in cryptocurrency fraud. BeInCrypto reported last month that scammers in Australia were falsifying cybercrime reports and impersonating law enforcement authorities to steal victims' assets.
Bad actors are also becoming more strategic in their timing, increasingly launching schemes during holiday periods when online shopping and digital transactions surge.
It is noteworthy that this trend is not a new phenomenon. The 2024 Internet Crime Complaint Center report from the FBI recorded over 150,000 complaints related to cryptocurrencies.
Losses amounted to $9.3 billion, a 66% increase from 2023. Investment frauds caused damages totaling $5.8 billion. Furthermore, TRM Labs reported that crypto-related fraud has drained at least $53 billion worldwide since 2023.
Regulators around the world are emphasizing the enforcement of laws. The Indian move reflects a broader effort to prosecute fraudsters and recover funds. Nevertheless, challenges persist. As the popularity of crypto increases, competition continues between fraudsters and those fighting against fraud.