Digital Loan Scam: An Inside Look at Cross-Border Exploitation

Two Chinese nationals have been arrested for operating illegal digital loan apps to exploit individuals during the COVID-19 pandemic. They routed funds via WazirX crypto platform and conducted fraudulent loan activities, charging high-interest rates. Victims' personal information was misused, leading to severe harassment and financial distress.

The Enforcement Directorate announced the arrest of two Chinese nationals on charges of operating illicit digital loan apps to swindle people amid the COVID-19 pandemic.

Identified as Xiao Ya Mao and Wu Yuanlun, the suspects were detained on November 13 in Tiruchirappalli, Tamil Nadu, under the Prevention of Money Laundering Act (PMLA). They used the WazirX cryptocurrency platform to channel funds illegally.

The investigation, based on multiple police FIRs, revealed that victims downloaded these apps and applied for microloans, resulting in the misuse of their personal data. Harassment tactics included sharing contacts and morphing photos to blackmail borrowers into further debt.

(With inputs from agencies.)