BENGALURU: Sleuths from the Bangalore zonal office of the Directorate of Enforcement (ED) on December 18 conducted raids at 21 premises across Karnataka, Maharashtra and Delhi in connection with the case of 4th Bloc Consultants and others involved in the large-scale cryptocurrency investment fraud, the probe agency said on Monday.
The searches were conducted under the Prevention of Money-Laundering Act (PMLA), 2002, on the “residential and office premises of the accused and their associates, based on the FIR and information shared by the Karnataka police alleging large scale organised financial fraud involving cryptocurrency-based investment platforms”, the ED said in a statement.
The investment platforms, according to the ED, were “operated by the accused persons targeting Indian and foreign nationals collecting funds in the guise of investment, majorly in the form of cryptocurrency, through websites designed by the accused,” the ED said.
The ED unmasked the “modus operandi of the accused, which included creating fake cryptocurrency investment platforms that mimicked genuine investment platforms and advertising astronomical returns, luring gullible investors from India and abroad with promises of quick returns and using the photos of reputed crypto experts and famous personalities without consent for promotions,” the agency said.
The ED said the accused paid initial investors some returns to gain trust and attract more investors like a classic multi level marketing (MLM) scheme. They were offered referral bonuses. The accused used social media platforms, such as Facebook, Instagram, WhatsApp and Telegram, to market their schemes and increase the scale of the fraud, the Statement said.
The accused also created multiple crypto wallets, foreign bank accounts and companies to gather the proceeds of crime (POC). They allegedly routed funds to India through hawala channels, accommodation entries and peer-to-peer (P2P) crypto transfers. They used the POCs to create assets in India and abroad. They have been using the modus operandi since 2015,” the agency said.
“The search operations helped identify some crypto wallets addresses of the accused persons, which have been used to receive the POC,” the ED said, adding, “Most of the accused are maintaining undisclosed foreign bank accounts and using foreign entities to launder the POC.”