India’s AML watchdog, Enforcement Directorate (ED) has seized cryptocurrency worth approximately $12 million from cryptocurrency wallets of exchanges including Binance, ZebPay, and WazirX as part of a money laundering investigation linked to an online gaming app called ‘E-Nugget’.
The scam app, which masqueraded as a gaming platform, promised high returns to users. However, after investments were made, the facade crumbled, leaving investors stranded. An FIR lodged at Kolkata’s Park Street Police Station led to the ED case under the Prevention of Money Laundering Act (PMLA).
Actions before $12 Million Seizure
The E-Nuggets app purportedly offered customers large returns on investment while disguising itself as a gaming platform. It presented a lucrative investment opportunity with real-money games that promised substantial commissions. However, once users invested money, the app disappeared, leaving investors unable to retrieve their funds. ED is pursuing this case and has taken significant actions even before it seized $12 Million.
The ED exposed the illegal activities of the app in 2022, revealing that some of the illicit gains were invested in digital assets. Around 2,500 dummy bank accounts were identified in connection with the scam.
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Two individuals, Aamir Khan and Romen Agarwal, were arrested in connection with the case, and a charge sheet was filed against them.
The agency seized, attached, or froze a total of approximately $12 million worth of assets in this case, including cash, cryptocurrencies, bank account balances, and offices.
Critics often point to the use of cryptocurrency for money laundering, but the nature of the blockchain makes it challenging to launder funds once identified.
Crypto exchanges have successfully traced and frozen funds linked to criminal activities in various instances.
The ED’s investigation revealed that the seized cryptocurrency, amounting to approximately $12 million, was transferred into the agency’s wallet. This seizure marks a significant step in the agency’s efforts to crack down on money laundering activities associated with cryptocurrency.
Cryptocurrency exchanges have been under increasing scrutiny from regulatory authorities worldwide, particularly concerning their role in facilitating illicit activities such as money laundering and fraud.
The seizure of close to $12 Million cryptocurrency assets from major exchanges like Binance, ZebPay, and WazirX highlights the need for stricter regulations and oversight within the cryptocurrency industry in India. The bitcoin transactions are not yet legalized in India though India introduced the taxation on cryptocurrencies and transactions related to crypto.
The ED’s action sends a clear message that it is committed to combating financial crimes, including those involving digital assets. As cryptocurrencies continue to gain popularity as a means of investment and transactions, regulatory agencies like the ED are stepping up efforts to ensure that they are not misused for illegal activities.
The ED’s investigation into the E-Nugget scam is ongoing, and further actions are expected as the agency continues to unravel the complexities of the case.
Meanwhile, cryptocurrency exchanges are facing increased pressure to implement robust compliance measures to prevent their platforms from being used for illicit purposes.
The seizure of $12 million worth of cryptocurrency is a significant development in the fight against financial crimes, and it highlights the growing importance of cryptocurrencies in money laundering activities.
ED declared this information in its press release.
As law enforcement agencies around the world ramp up their efforts to combat crypto-related crimes, the industry is likely to face increased scrutiny and regulation in the coming years.
