NEW DELHI: The Enforcement Directorate (ED) has conducted raids in several cities, including Delhi, Jaipur, and Mumbai, under the Foreign Exchange Management Act (FEMA) in connection with a Rs 600 crore cryptocurrency conversion case. So far, bank accounts containing Rs 2.18 crore belonging to the accused have been frozen.
According to ED officials, the investigation began after a "newspaper report" revealed that an Indian national, Chirag Tomar, was serving a prison sentence in the United States for stealing over 20 million dollar from hundreds of victims. He had used fake or spoofed websites mimicking the cryptocurrency exchange Coinbase to carry out the fraud. He was sentenced to 60 months in prison by a US court in October last year.
During the probe, the ED discovered that trusted websites were spoofed using search engine optimization techniques. This made the fake websites appear at the top of search results, making them look legitimate.
The fake website appeared "exactly similar" to the real one, except for the contact details. "When users entered the login credentials, the spoofed website would show it wrong and thus the users would contact the number given on the spoofed website which would eventually connect them to the designated call centre managed by Tomar," officials said.
Once the fraudsters gained access to victims' accounts, they transferred their cryptocurrency holdings to wallets under their control. The stolen cryptocurrency was then sold on the website localbitcoins.com and converted into Indian Rupees through Indian crypto exchanges, according to the ED’s investigation report.
Officials stated that the money was then "transferred to the bank accounts of Tomar and his family members." The ED has so far identified Rs 15 crore received by Tomar and his family through this scheme.
During the raids, several bank accounts linked to the Tomar family were frozen, including deposits worth Rs 2.18 crore. Officials also claimed that a similar method of selling doubtful cryptocurrency on LocalBitcoins and converting it into Indian Rupees through Indian crypto exchanges was discovered during the searches.