On December 18, India”s Enforcement Directorate (ED) carried out extensive raids at 21 locations across Karnataka, Maharashtra, and Delhi, targeting a fraudulent cryptocurrency investment network. This operation was initiated under the Prevention of Money-Laundering Act, 2002, in response to a case involving 4th Bloc Consultants and its associates.
The investigation was prompted by a First Information Report (FIR) and intelligence provided by the Karnataka State Police, which pointed to organized financial fraud through cryptocurrency investment schemes. The ED”s action involved thorough searches of residential and commercial properties linked to the accused.
According to reports, the suspects were allegedly involved in defrauding both domestic and international investors by soliciting funds under the guise of high-return cryptocurrency investments. The ED”s findings during the raids revealed that the network had established counterfeit cryptocurrency investment platforms designed to imitate legitimate websites, promising unrealistic returns.
These fraudulent platforms targeted a wide array of investors, both within India and abroad, by advertising the potential for rapid profits. The operators of these schemes reportedly misappropriated images of recognized cryptocurrency experts and public figures to lend credibility to their operations.
To further entice investors, the accused paid limited returns to initial participants, fostering a false sense of security that encouraged more investments. Their business model mirrored a multi-level marketing (MLM) strategy, with referral bonuses offered to participants. The network leveraged various social media channels, including Facebook, Instagram, WhatsApp, and Telegram, to promote their schemes.
The investigation identified that the network had established numerous mechanisms to facilitate fund collection, including multiple cryptocurrency wallets, foreign bank accounts, and shell companies. Funds were allegedly transferred to India through hawala channels and peer-to-peer cryptocurrency transactions, with proceeds used to acquire assets both in India and internationally.
Since its inception in 2015, the network has reportedly generated substantial illicit proceeds in cryptocurrency, which were either utilized directly in transactions or converted to cash and deposited in banks through various platforms. The ED discovered valuable assets during the raids, in addition to multiple crypto wallet addresses believed to be controlled by the accused for laundering purposes.
Furthermore, investigations revealed that many individuals involved maintained undisclosed foreign bank accounts and entities to facilitate their money laundering activities. These coordinated enforcement actions represent a significant step in an ongoing investigation into a fraud network that has operated across multiple jurisdictions for nearly a decade.
