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Dimapur: In a significant crackdown, the Enforcement Directorate (ED) has exposed a sprawling money laundering operation connected to a fraudulent Bitcoin investment racket. Originating from Dimapur, Nagaland, the illicit scheme involved 299 individuals, including 76 Chinese entities and 10 Chinese nationals, alongside two other foreign nationals.
The ED’s meticulous investigation has resulted in the seizure of both movable and immovable properties valued at over Rs 455 crores. This illicit financial network, described by the ED as a complex web of deception, has sent shockwaves through the financial landscape.
The prosecution complaint filed by the ED before the Hon’ble Special Court (PMLA), Dimapur, Nagaland, marks a crucial step in bringing the culprits to justice. The court, having taken cognizance of the offence of money laundering, has acknowledged a prima facie case under the Prevention of Money Laundering Act, 2002 against the 299 accused individuals and entities.
Click here to download the ED’s press release
The genesis of the investigation can be traced back to an FIR registered by the Cyber Crime Police Station in Kohima, Nagaland. The FIR invoked various sections of the Indian Penal Code, 1860, and the Information Technology Act, highlighting the duping of gullible investors who were promised astronomical returns on their investments.
The modus operandi of the scam revolved around an app-based token named “HPZ Token,” supposedly used for mining Bitcoins and other cryptocurrencies. Investors, enticed by promises of substantial returns, fell victim to a well-orchestrated scheme. For an initial investment of ₹57,000, the fraudsters pledged returns of ₹4,000 per day for three months. However, the ED’s investigation revealed that after an initial payment, continuous fund requests left investors in financial distress.
Earlier search operations conducted at 44 locations nationwide resulted in the freezing of Rs 176.67 crores held by shell entities in various banks and virtual accounts. Additionally, movable and immovable properties totaling Rs 278.70 crores, registered under dummy entities, were attached. The cumulative seizure and attachment now stand at a staggering Rs 455.37 crores.
The financial irregularity investigation agency emphasises the tech-savvy nature of the fraud, with shell entities creating multiple bank accounts and merchant IDs for the rotation and layering of proceeds of crime. This complex manoeuvring underscores the depth of the illicit financial network.
As the investigation unfolds, the ED anticipates more revelations regarding the scale and entities involved in this fraudulent bitcoin investment racket. It serves as a stark reminder of the importance of vigilance in the digital financial landscape and the need for stringent measures to protect investors from falling prey to such scams.
This crackdown by the ED marks a significant stride in curbing financial malpractices, sending a clear message that perpetrators of complex financial crimes will be held accountable. The ongoing investigation promises to unearth more details, shedding light on the intricate workings of this illicit financial network.
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