A major Gujarat connection has surfaced in the Gurugram digital arrest scam, with investigators recovering crucial evidence from Ahmedabad-based fish trader Ayyappa, whose alleged cryptocurrency transactions are helping police trace an international cyber fraud network linked to Cambodia. The case, reported by The Indian Express (June 9, 2025), has revealed how stolen money was converted into cryptocurrency and routed overseas, while investigators say cyber gangs were attempting to erase their financial trail.
What is the case?
The Gurugram Police’s Special Investigation Team (SIT) is investigating a massive digital arrest scam, in which fraudsters impersonated law enforcement agencies and intimidated victims into transferring money. One such complaint involved ₹1.23 lakh, but investigators say the same network is linked to 181 similar complaints.
According to official data cited in the report, over 1.23 lakh digital arrest cybercrime cases worth around ₹1,935 crore were reported in India in 2024.
Ahmedabad fish trader arrested
The Gujarat connection centers on Ayyappa, an Ahmedabad-based fish trader, who was arrested by the Gurugram SIT on April 29, 2025. At the time of his arrest, he was already out on bail in another case.
Police camped near his residence for three days before taking him into custody. His wife, 19-year-old son, and 15-year-old daughter are currently lodged in Bhavnagar jail. Investigators describe Ayyappa as the main link between the secondary layer of mule bank accounts and the key conspirators who are still absconding.
How the money was allegedly moved
During interrogation, police alleged that the Hyderabad gang involved in the scam, collected money through mule bank accounts, converted the funds into USDT (Tether cryptocurrency) and transferred the cryptocurrency to Ayyappa.
Deputy Commissioner of Police Dr. Hitesh Yadav said investigators had been tracking Ayyappa for a long time and expect his interrogation to provide leads in this and other digital arrest cases.
Cryptocurrency trail and mobile phone evidence
Earlier, The Indian Express reported that the Indian Cyber Crime Coordination Centre (I4C) under the Union Home Ministry alerted investigators that 11 Hyderabad bank accounts were allegedly connected to 181 complaints. According to one complaint, ₹21 crore allegedly passed through these accounts in just three months.
Police said that after Ayyappa confessed that Telegram chats related to the Gurugram case and records of USDT deposits were stored on his mobile phone, investigators obtained a court order and transferred the phone into official case evidence.
Authorities claim Ayyappa had not informed Gujarat Police about these cryptocurrency transactions and USDT deposits, which are now being examined as part of the Gurugram investigation.
Recovery of money
The Gurugram investigation team has reportedly recovered around ₹2 crore of the stolen money, with some amount recovered from banks used in the scam, and some cash recovered from Samudrala, another accused, at the time of his arrest.
The report also states that another accused, Piyush, and a group of associates were arrested and later obtained bail. Another accused, Samudrala, was arrested by police in Ahmedabad in connection with the alleged Hyderabad gang.
Fake job offers and bank accounts
Investigators allege that the network recruited people by offering fake jobs and persuaded them to open bank accounts, sign blank cheque books, and sign withdrawal forms, allowing the cyber fraud network to use these accounts as mule accounts for moving stolen money before converting it into cryptocurrency.
International link
Investigators believe the cryptocurrency trail points toward a Cambodia-linked cyber fraud network, making the Gujarat-based arrests and digital evidence crucial in uncovering the larger international operation.
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