India's Enforcement Directorate (ED) coordinated searches at 21 locations across the states of Karnataka, Maharashtra, and Delhi as part of the investigation into a large-scale crypto scam believed to have been operating for nearly 10 years.
Searches were conducted on December 18, 2023, under the Prevention of Money Laundering Act (PMLA). The targets were residential addresses and offices related to 4th Bloc Consultants and their associates.
The largest cryptocurrency bust ever in India?
Authorities say this group has operated fake crypto investment platforms to lure both retail investors in India and internationally with promises of very high returns.
According to the ED, the case originated from a complaint by the police and intelligence information from the Karnataka state police.
Investigators allege that the perpetrators designed professional-looking websites identical to legitimate global crypto exchanges, including account statistics, balances, and transaction history.
However, these platforms were essentially just a facade. Authorities confirmed that there were almost no real transactions taking place.
Instead, this crypto scam group has been cycling investors' money in a Ponzi scheme or traditional multi-level marketing model.
To build trust, the organizers are accused of illegally using the images of famous crypto experts and public figures without permission.
Initial investors would receive small profit payouts to build trust. Subsequently, they were encouraged to invest more and invite new participants to receive referral bonuses.
As the model expanded, the perpetrators intensified their use of social media like Facebook, Instagram, WhatsApp, Telegram… to reach and entice more victims.
The ED believes this network has targeted both retail investors inside and outside India.
Investigators stated that the money obtained from the criminal activities was laundered through a complex network of crypto wallets, undeclared foreign bank accounts, shell companies, and underground money transfer channels.
The scam group also transfers money through peer-to-peer crypto transactions, which are then converted into cash or deposited into bank accounts.
During the searches, the ED discovered numerous crypto wallet addresses controlled by the perpetrators, along with movable and immovable assets purchased domestically and abroad with illicit funds.
Additionally, authorities have identified a number of foreign entities used to obscure the trail of money.
Notably, investigators believe this activity began at least in 2015. The criminal group has also altered methods to evade scrutiny as crypto markets have faced increasing regulation.
The case is still under investigation.