ED uncovers crypto trading scam of around $35 million
Enforcement Directorate begins money-laundering probe into an alleged cryptocurrency over-the-counter trading scam involving virtual digital assets and investor inducement through promised discounted token allocations.
- The Enforcement Directorate investigates money-laundering offences and can trace proceeds of crime under Indian economic-law enforcement provisions.
- Virtual digital assets can be used in schemes that promise discounted allocations, fast trading gains, or opaque routing of funds.
- A cybercrime complaint from South Andaman triggered the investigation.
What happened
The Enforcement Directorate has opened a money-laundering probe through its Bengaluru zonal office into an alleged cryptocurrency over-the-counter trading scam. The alleged fraud is pegged at around $35 million, which is higher than the $10 million figure mentioned in the original first information report.
Investigators say the accused induced investors with promises of discounted token allocations and then failed to deliver the tokens fully after market prices rose. The Enforcement Directorate has named Mohammed Waseem, Saurabh Diwan, and Vaibhav Gupta as accused, and suspects that funds were routed to a Bengaluru resident, Ravindra K., whom it believes to be the mastermind.
UPSC can frame questions around the regulation of virtual digital assets in India, the role of the Enforcement Directorate under the Prevention of Money-laundering Act, 2002, and the policy challenge of balancing innovation with investor protection and anti-money-laundering enforcement.
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