New Delhi: The Enforcement Directorate (ED) has uncovered a ₹260 crore (approximately $31.2 million USD) cryptocurrency fraud scheme targeting both Indian and foreign nationals, officials announced today.The investigation, initiated under the Prevention of Money Laundering Act (PMLA) based on First Data Reports (FIRs) filed by the Central Bureau of Investigation (CBI) and Delhi Police, reveals a sophisticated network of fraudsters impersonating law enforcement and tech support personnel.
The ED investigation details a pattern where perpetrators posed as police officers or investigators, threatening victims with arrest unless they surrendered their assets. Simultaneously, other fraudsters impersonated representatives from Microsoft and Amazon, offering fraudulent tech support services to dupe individuals. Victims’ funds were then converted into cryptocurrencies, primarily Bitcoin, and transferred to individuals and entities operating in the United arab Emirates (UAE) via a complex network of hawala operators.
According to the ED, the illicit funds were initially accumulated in multiple cryptocurrency wallets as Bitcoin before being converted into Tether (USDT) – a stablecoin pegged to the US dollar – for easier transfer and concealment.Hawala networks, traditional informal value transfer systems, were then utilized to liquidate the USDT into cash within the UAE. The agency is currently working to identify all individuals involved in the scheme,including those facilitating the hawala transactions and the ultimate beneficiaries of the fraud.
Understanding Cryptocurrency Fraud & Hawala Networks: This case highlights the growing trend of cybercrime utilizing cryptocurrency as a means of laundering illicit funds. bitcoin, while offering a degree of anonymity, leaves a traceable record on the blockchain. However, converting to stablecoins like USDT and utilizing hawala networks complicates tracing the funds. Hawala systems operate outside of traditional banking regulations, relying on trust and a network of brokers to transfer money across borders without physical currency movement. This makes them attractive to criminals seeking to evade detection.
The ED’s investigation is ongoing, with a focus on identifying and freezing additional cryptocurrency wallets linked to the fraud and bringing the perpetrators to justice. Authorities are also collaborating with international law enforcement agencies to track down individuals and assets located outside of India. This case serves as a stark reminder of the vulnerabilities associated with online fraud and the importance of exercising caution when interacting with unsolicited communications claiming to be from law enforcement or tech support companies.