ED Busts Major Crypto Scam: Arrests in Multi-State Operation

The Enforcement Directorate (ED) has arrested two individuals for a cryptocurrency scam involving mule accounts and illicit cash conversion. The operation spanned multiple states, revealing a complex network used to defraud a senior citizen of Rs 33 Lakh and transactions with overseas entities.

The Directorate of Enforcement (ED) in Chennai has arrested two individuals involved in a digital arrest scam that defrauded victims through mule accounts. The accused allegedly converted illicit cash into cryptocurrency and sent it overseas, prompted by a senior citizen's complaint to the Chennai Police about a Rs 33 Lakh fraud.

According to ED's statement, the suspects were instrumental in managing mule accounts, cash conversion, and overseas cryptocurrency transfers. Arrests occurred in Kolkata and Delhi. The accused exploited Cash Deposit Machines (CDMs) to channel money into fintech-related accounts, then acquired cryptocurrency to disguise and move funds with foreign aid.

The ED's investigation exposed a network of layered mule bank accounts used to route fraudulent funds. The agency conducted raids at over 20 locations across states including West Bengal, Madhya Pradesh, Uttar Pradesh, Gujarat, and Maharashtra. Seized items included mobile phones, laptops, and cryptocurrency in BTC and USDT. The accused devised a sophisticated cash-to-crypto conversion system, transferring millions derived from digital fraud schemes.

Moreover, the probe highlighted major lapses by fintech companies in KYC compliance, which facilitated transactions with fake entities. These deposits, suspected as tainted money from digital crimes, are under scrutiny. The examination extends to companies' distributors, retailers, and associated bank accounts.

(With inputs from agencies.)