The Enforcement Directorate (ED) has seized cryptocurrency worth Rs 1,646 crore in what it has described as its largest-ever operation as part of a money laundering investigation linked to a fraudulent investment scheme. The probe uncovered a scheme in which depositors were deceived under the pretext of securities investment.
According to an official statement, the funds were linked to the “fraudulent” and unregistered offering and sale of securities under the guise of investments through the ‘BitConnect lending program.’
Officials from the Ahmedabad office of the central probe agency seized Rs 13.50 lakh in cash, an SUV, and multiple digital devices following a fresh round of searches conducted on Saturday.
The case, filed under the Prevention of Money Laundering Act (PMLA), originated from an FIR lodged by the Surat Police crime branch. Authorities believe the alleged fraud took place between November 2016 and January 2018.
A team of technology experts was deployed by the ED to analyse what it described as a “complex web” of transactions, many of which were executed through “numerous” cryptocurrency wallets.
It was determined that transactions were facilitated via the “dark web” to obscure their origins and make tracing difficult. Investigators tracked multiple web wallets and gathered intelligence to pinpoint the location of the digital devices containing the cryptocurrency.
Following these efforts, crypto assets valued at Rs 1,646 crore were seized and transferred into the agency’s designated crypto wallet, marking the largest-ever seizure of virtual digital assets in an ongoing money laundering probe.
During its investigation, the ED found that BitConnect’s founder had established a “worldwide network of promoters” and incentivised them with commissions for their promotional activities. To attract investors, BitConnect falsely claimed it would deploy a proprietary “volatility software trading bot” (Trading Bot), which would allegedly generate returns of up to 40 per cent per month.
The agency discovered that fictitious returns were posted on the BitConnect web portal, reflecting an average of one per cent per day, equivalent to approximately 3,700 per cent on an annualised basis. However, the investigation determined that these claims were deceptive and that investor funds were not utilised for trading through the supposed Trading Bot.
Instead, funds were misappropriated for the benefit of the accused and their associates by being transferred to digital wallet addresses controlled by them.
The agency had previously attached assets worth Rs 489 crore in connection with the case. Officials also stated that foreign nationals had invested in BitConnect and that the “main accused” is currently under investigation by federal authorities in the United States. The money laundering probe remains ongoing as authorities continue to examine the full scope of the fraud.
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