The Enforcement Directorate (ED) has made significant progress in its investigation into a cryptocurrency scam by filing a charge sheet against 299 entities, including individuals of Chinese origin, under the anti-money laundering law.

Allegations of investor duping in the cryptocurrency mining sector, including Bitcoin, have prompted the ED to take action. The special court in Dimapur, Nagaland, has acknowledged the prosecution complaint under the Prevention of Money Laundering Act (PMLA).

A local publication reported that the charge sheet includes 76 entities controlled by Chinese nationals, with 10 directors of Chinese descent, and two entities managed by individuals from other countries. This move by the ED is based on a First Information Report (FIR) by the Cyber Crimes Unit of Kohima Police, which uncovered a scheme using a mobile application called “HPZ Token” to deceive investors.

Further investigations revealed the creation of bank accounts and merchant IDs by “shell entities” with “dummy” directors to launder criminally obtained funds. These funds were acquired through illicit online gaming, betting, and investments in Bitcoin mining, luring investors with promises of high returns.

Investors were promised daily returns of INR 4,000 (approx. $48.27) over three months with an investment of INR 57,000 (approx. $688), but these promises were not fulfilled. The ED’s nationwide search has resulted in the seizure of assets and deposits worth INR 455 crore, approximately USD 546 million.

The ED is also investigating nine overseas companies for their involvement in laundering funds from a Bitcoin-based Ponzi scheme operated by Variable Tech Pte Ltd in Singapore. This scheme collected 80,000 bitcoins by deceiving investors with promises of high returns, with INR 6,606 crore diverted for foreign property purchases through the companies under scrutiny.

The companies implicated in the alleged laundering operate in Hong Kong, Dubai, and Estonia, including names like Amaze Mining Blockchain Research Ltd and Crypto Capital, Estonia. This investigation is part of the Indian government’s broader effort to regulate the cryptocurrency market, following actions against Binance and other offshore exchanges for non-compliance with anti-money laundering policies.

In December, compliance notices were issued to various exchanges, including Binance, KuCoin, and Huobi, by India’s Financial Intelligence Unit (FIU) to protect local investors from non-compliant platforms. These measures align with the Prevention of Money Laundering Act (PMLA) and demonstrate a concerted effort to combat illegal activities in the cryptocurrency sector.

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