BENGALURU: The Directorate of Enforcement (ED), Bengaluru zonal office, has initiated an investigation into the alleged large-scale scam in Over-the-Counter Trades (OTC) in Virtual Digital Assets (VDA) under the Prevention of Money Laundering Act (PMLA). The ED investigation is based on an FIR filed by the Cyber Crime police station, South Andaman, on a complaint filed by a Dutch national of a scam involving USD 35million.
“The scam was perpetrated by the accused persons by cheating on the promise of discounted crypto tokens (MultiverseX, Kava, BEAM, GRASS, SUI, VANA, AGLD etc) to the investors, which were never supplied fully,” the ED stated in an official release on Tuesday.
“The searches resulted in seizure of incriminating evidences in the form of digital devices, e-mails, and wallets used for siphoning off Proceeds of Crime (PoC). The PoC seized were in the form of VDAs worth around 8700 USDT -- Tether is a “stablecoin” in the cryptocurrency market, pegged to the US dollar. Searches have valued the scam at around $35million -- much higher than the amount reported in the FIR of around $10million.
There are many foreign entities/investors, who have also been cheated by the accused persons in a similar manner. These entities/investors have not yet filed criminal complaints,” added the central agency.
“As per the allegation, the accused persons named Mohammed Waseem, Saurabh Diwan and Vaibhav Gupta leveraged private Telegram groups, in-person meetings, and false credentials to gain the complainant’s trust.
They initially fulfilled smaller cryptocurrency OTC transactions smoothly to intentionally induce the complainant into investing significantly larger sums. The accused persons falsely claimed that they held guaranteed, steeply discounted direct token allocations from prominent crypto projects such as MultiverseX, Kava, BEAM, GRASS, SUI, VANA, AGLD etc,” stated the ED.
“After receiving multi-million dollar investments from the complainant, the accused abruptly ceased delivering digital tokens as market conditions surged, withholding the promised distributions. These investments were obtained by the influencers through crypto wallets, which were routed to Ravindra K based in Bengaluru and said to be the mastermind behind the OTC deals,” added the ED.
The ED conducted searches in the case on July 18 and 19 at multiple places to unearth the following modus operandi. “The accused persons are self-styled ‘Key Opinion Leaders’ in crypto industries. They propagate initial token offerings/private placements through social media networks such as Telegram, WhatsApp, Instagram, websites etc, and claim to obtain and provide allotments from initial token offerings/private placements of VDAs at a discount through their tie-ups with blockchain developers,” the agency explained.
“The accused canvassed unsuspecting investors to invest through them in tokens propagated by them; collect money in VDAs from unsuspecting investors in the field by promising huge returns and cheat the investors by not providing them the promised allotments of VDAs or not providing the returns promised.
The PoC obtained through criminal conspiracy, cheating etc are diverted by the accused persons for personal purposes such as investment in movable/immovable properties, personal expenses, business purposes etc,” added the ED.