India's Law Enforcement Directorate (ED) coordinated raids at 21 locations across the states of Karnataka, Maharashtra, and Delhi as part of an investigation into a large-scale crypto scam, believed to have been operating for nearly 10 years.
The searches were conducted on December 18, 2023, under the Anti-Money Laundering Act (PMLA). The targets were home and office addresses associated with 4th Bloc Consultants and its partners.
Is this the biggest cryptocurrency bust ever in India?
Authorities said the group operated fake crypto investment platforms to lure both Indian and international retail investors with promises of very high returns.
According to ED , the case stemmed from a police complaint and intelligence from the Karnataka state police force.
Investigators allege that the suspects personally designed professional websites that were identical to legitimate crypto exchange worldwide, including interfaces for viewing account statistics, balances, and transaction history.
However, these platforms are essentially just a facade. Authorities have confirmed that virtually no real trading activity takes place.
Instead, this crypto scam group circulated investors' money using a traditional Ponzi scheme or multi-level marketing model.
To build trust, the organizers allegedly used images of well-known crypto experts and public figures without permission.
Initial investors receive small returns to build trust. They are then encouraged to contribute more money and invite new members to join in exchange for referral bonuses.
As the scheme expands, perpetrators increasingly leverage social media platforms like Facebook, Instagram, WhatsApp, and Telegram to reach and lure more victims.
ED claims that this network targeted both retail investors inside and outside India .
Investigators said the proceeds from the crime were laundered through a complex network of crypto wallets, undeclared offshore bank accounts, shell companies, and underground money transfer channels.
The scam group also transferred money through peer-to-peer crypto transactions, then converted it into cash or deposited it into bank accounts.
During the search, ED discovered numerous crypto wallet addresses controlled by the suspects, along with movable and immovable assets purchased domestically and internationally with illicit funds .
In addition, authorities have identified a number of foreign entities being used to conceal the flow of money.
Notably, investigators believe this activity began at least as early as 2015. The criminal group also changed its methods to evade detection as crypto markets became increasingly regulated.
The incident is still under investigation.
