The Enforcement Directorate (ED), an Indian law enforcement agency, has successfully seized 90 crores ($10.5 million) from a fraudulent online app called E-Nuggets. This operation was made possible with the assistance of popular crypto exchanges such as Binance, ZebPay, and WazirX.
According to a report by the Hindu, the ED discovered that E-Nuggets, an online gaming app, had cryptocurrencies worth $10 million stored across 70 different crypto wallet accounts on the aforementioned exchanges. The ED promptly contacted these exchanges, requesting them to block the wallet addresses and transfer the crypto assets to the agency’s own wallet.
The ED’s report alleges that E-Nuggets presented itself as a gaming platform while offering customers the promise of high returns on investment. The app featured various real-money games that enticed users with large commissions. However, once users invested their money, the app disappeared, leaving investors unable to retrieve their funds.
In response to this scam, the ED has seized properties worth over 163 crores ($19.5 million), including cash, cryptocurrency, account balances, and office space. The investigation revealed that the scam app first came under scrutiny in 2022 when some of its funds were invested in digital assets. The ED discovered 2,500 dummy bank accounts and recovered 19 crores ($2.2 million) in cash.
The alleged mastermind behind the scheme, Aamir Khan, was arrested alongside his accomplice Romen Agarwal and is currently in custody. Since the fraudulent transactions involved digital assets, law enforcement agencies were able to trace, freeze, and seize the funds.
Critics often highlight the potential for money laundering through cryptocurrencies. However, the transparent nature of blockchain technology makes it challenging to launder funds once they have been identified. In several instances, crypto exchanges have successfully traced and frozen funds associated with criminal activities.
One noteworthy example is the 2016 Bitfinex hack, where hackers stole 119,756 Bitcoin (BTC) from the exchange. However, the perpetrators were ultimately apprehended in 2022 while attempting to launder the funds.
Cointelegraph reached out to Binance and ZebPay for comments but had not received a response at the time of publication.
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