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A large-scale crypto scam in India has raised concerns about the security of digital asset investments. On August 6, the Enforcement Directorate (ED) initiated a large operation throughout Delhi, Noida, Gurugram, and Dehradun aimed at a sophisticated cyber fraud racket that is alleged to have used the disguise of global tech giants Microsoft and Amazon's tech support to defraud victims.
According to the agency, the scammer operated as a technical support agent, calling and communicating with unsuspecting victims in both India and overseas. The scammers sometimes dressed as a police officer or other investigative authority to further threaten the victim with allegations of criminal action and arrest unless immediate payment was made.
Authorities have traced a Rs. 260 crore fraud, exposing the growing threat of crypto-related financial crimes. The extorted money, over Rs. 260 crore, was directed into cryptocurrencies, allowing the scammer to make the money disappear down the trail of transactions. The ED initiated its investigation under the Prevention of Money Laundering Act (PMLA) in response to reports and FIRs filed by the CBI and Delhi Police.
The ED crypto raid revealed layers of illegal transactions involving multiple shell companies. Searches were conducted at 11 locations in which the ED aimed to obtain digital and financial evidence relating to the scam.
In a related but separate case, the ED has frozen assets worth Rs. 42.8 crore belonging to Chirag Tomar, an Indian citizen arrested in the U.S. in conjunction with a massive cryptocurrency scam.
Tomar allegedly embezzled over $20 million (around Rs. 166 crore) with sham websites based on the popular crypto exchange Coinbase. He redirected investors to these counterfeit sites and diverted large amounts from victims. The ED took action after American authorities arrested Tomar, and he continues to be in custody abroad.
Also Read: A Scam or an Inside Job? How CoinDCX Lost $44M in Crypto
Meanwhile, Bengaluru Police have uncovered another massive cryptocurrency theft at a domestic trading platform. A 28-year-old suspect has been arrested for his alleged involvement in siphoning off Rs. 384 crore worth of digital assets.
The case came to light after Neblio Technologies Pvt. Ltd. reported unauthorized access to its corporate crypto wallet. Reportedly, on July 19, unknown hackers siphoned away $44 million worth of crypto from the company and diverted it to six unknown wallets. Rahul Agarwal, an employee of the company, is now with the police for interrogation.
These three significant incidents, totaling over Rs. 686 crore in fraud-related activity, highlight the potential risks of cryptocurrency being misused in cybercrime. Law enforcement agencies in different jurisdictions are now intensifying the effort to track money and ultimately break down these activities and networks that are using digital currencies to avoid legal obligations imposed by the financial system.
As crypto adoption continues to grow, we expect regulators to impose increasingly tighter compliance frameworks and oversight to protect investors and mitigate misuse.
