Bengaluru, July 21: The Directorate of Enforcement (ED) has uncovered an alleged cryptocurrency fraud valued at nearly USD 35 million during its money laundering investigation into over-the-counter (OTC) Virtual Digital Asset (VDA) transactions, significantly increasing the estimated scale of the case from the USD 10 million cited in the original FIR. The investigation, linked to a complaint registered by the Cyber Crime Police Station in South Andaman, has led to the seizure of digital evidence and cryptocurrency worth 8,700 USDT.
The Bengaluru Zonal Office of the ED initiated the investigation under the Prevention of Money Laundering Act (PMLA), 2002. Search operations were conducted on July 18 and 19 at multiple locations in connection with the alleged fraud involving cryptocurrency investments.
According to the ED, the investigation originated from an FIR registered by the Cyber Crime Police Station in South Andaman following a complaint filed by a Dutch entity alleging that it had been cheated in cryptocurrency transactions worth millions of dollars.
The agency alleged that the accused, identified as Mohammed Waseem, Saurabh Diwan and Vaibhav Gupta, induced foreign investors to invest by offering cryptocurrency tokens at heavily discounted prices. The tokens allegedly included MultiverseX, Kava, BEAM, GRASS, SUI, VANA and AGLD.
Investigators alleged that the accused built confidence among investors by successfully completing smaller OTC cryptocurrency transactions before encouraging larger investments. They allegedly claimed to have guaranteed access to discounted token allocations from leading cryptocurrency projects.
According to the ED, the accused allegedly stopped delivering the promised digital assets after receiving multi-million-dollar investments as market prices increased. The agency stated that the funds were transferred through cryptocurrency wallets to Ravindra K, a Bengaluru-based individual identified as the alleged mastermind behind the OTC transactions.
The ED further alleged that the accused projected themselves as “Key Opinion Leaders” within the cryptocurrency industry and promoted investment opportunities through Telegram, WhatsApp, Instagram and websites to attract investors.
The investigation also alleges that the proceeds of crime were diverted for personal expenses, business activities and investments in movable and immovable properties.
During the searches, the ED seized digital devices, email accounts and cryptocurrency wallets allegedly linked to the movement of the proceeds of crime. The agency also seized virtual digital assets valued at 8,700 USDT.
The ED stated that its investigation indicates that several foreign entities and investors may have suffered similar losses, although many have not yet lodged formal complaints. The agency said further investigation into the case is continuing.
