The Directorate of Enforcement (ED) of India recently seized a major cryptocurrency money laundering case connected to a gaming app and froze crypto assets worth ₹90 crore ($10 million). The frozen assets were found in 70 accounts linked to major cryptocurrency wallets like Binance, ZebPay, and WazirX. The app in question, “E-Nugget,” lured gamers with promises of high returns on their investments but abruptly ceased operations, preventing users from withdrawing their funds. The investigation into the scam began in 2022 when the ED discovered that part of the money obtained was invested in digital assets. As a result, around 2,500 fake bank accounts were identified and analyzed, leading to the seizure of ₹19 crore ($2.27 million).
Following their investigations, authorities arrested the mastermind behind the scam, named Amir Khan, who is currently in Judicial Custody. In November 2022, ED requested Binance to freeze 150.22 Bitcoins, valued at $2.5 million at the time, which were linked to E-Nugget. This seizure brought the total value of assets seized in the case to $8.4 million. Additionally, five more individuals from Kolkata were arrested in September in connection to the gaming app, and raids were conducted where multiple SIM boxes, over 2,000 SIM cards, about 3,000 ATM cum debit cards, and laptops were seized. Khan, the kingpin, was reportedly hiding outside India at the time of the arrests.
India has seen a rise in retail crypto adoption in recent years, with the country being among the top nations in this regard. This increase in adoption has also seen a surge in cryptocurrency-related scams and money laundering activities, prompting authorities like the ED to take action against such crimes. The ED’s seizure of crypto assets worth ₹90 crore linked to the E-Nugget scam is part of their efforts to crack down on fraudulent activities in the cryptocurrency space. By freezing assets stored in major cryptocurrency wallets and bringing perpetrators to justice, the ED aims to protect investors and maintain the integrity of the crypto market in India.
The case of E-Nugget serves as a cautionary tale for investors in the cryptocurrency space, highlighting the risks associated with fraudulent schemes promising high returns. It also underscores the importance of conducting thorough due diligence before investing in any platform or app, especially those in the gaming or cryptocurrency sectors. With the rise of digital assets and decentralized finance, regulators and law enforcement agencies like the ED are increasingly vigilant against money laundering and scams in the crypto market. By cracking down on illicit activities and holding perpetrators accountable, authorities aim to create a safer environment for investors and legitimate businesses operating in the cryptocurrency space.
The ED’s investigations into the E-Nugget scam have revealed the use of fake bank accounts and sophisticated tactics to deceive investors and launder money through cryptocurrencies. The discovery of over 2,500 fake bank accounts and the seizure of ₹19 crore ($2.27 million) are significant milestones in the case, highlighting the complexity and scale of the operation. Additionally, the arrests made by authorities and the freezing of assets in major cryptocurrency wallets demonstrate a coordinated effort to dismantle the criminal network behind the scam. The ED’s actions send a clear message to perpetrators of financial crimes in the cryptocurrency space that they will be held accountable and face consequences for their illicit activities.
