Indian Enforcement Directorate Cracks Down on Cryptocurrency Fraud Ring

On Jun 9, 2024

Cryptocurrency fraud is a growing concern globally, with perpetrators constantly developing new methods to deceive unsuspecting victims. Recently, a significant case emerged in India, where authorities managed to dismantle a sophisticated fraud ring targeting a foreign national. This incident sheds light on the elaborate tactics employed by fraudsters and underscores the critical need for vigilant regulatory frameworks and public awareness.

Investigation Initiated by FIR Against Multiple Accused

The Enforcement Directorate (ED) of India has taken significant steps against a cryptocurrency fraud ring that targeted a foreign national. The crackdown occurred after the accused managed to persuade the victim to transfer $400,000 to a cryptocurrency account, which was set up using unauthorized remote access to her computer. In response to the investigation, the ED has seized digital evidence, frozen fixed deposits, and confiscated jewelry related to the case. The probe is ongoing and continues to reveal more details about the fraud network.

Operations Conducted Across Multiple Locations

On June 6, the ED conducted search operations against Prafful Gupta and his associates in various locations, including Delhi, Haryana, and Kanpur (Uttar Pradesh). These searches were part of an ongoing investigation that began with a First Information Report (FIR) filed by India’s Central Bureau of Investigation (CBI). The FIR named several individuals, including Prafful Gupta, Sarita Gupta, Kunal Almadi, Gaurav Pahwa, Rishabh Dixit, and other unidentified persons.

Unauthorized Access and Fraudulent Transactions

The fraudsters managed to convince the victim that her bank account was insecure, prompting her to transfer $400,000 to a cryptocurrency account created in her name. Unauthorized remote access was used to set up this account using the victim’s mobile number and email ID. The transferred funds were then converted into cryptocurrency and dispersed to various accomplices. According to the ED, the caller gained unauthorized remote access to the victim’s computer and set up a cryptocurrency account in her name using her contact details.

Extensive Network of Fake Entities and Accounts

The investigation revealed that the cryptocurrency funds were transferred to Prafful Gupta and his mother, Sarita Gupta. These funds were subsequently sold, and the proceeds were moved to fake entities within India. The money was further distributed to thousands of accounts that had been set up with fake Know-Your-Customer (KYC) details. Some of the funds ended up with a fintech company based in Gurgaon, which assisted in layering the proceeds without conducting proper KYC checks.

Seizure of Assets and Ongoing Investigation

The ED’s search operations resulted in the seizure of substantial digital evidence. Additionally, the authorities froze fixed deposits worth Rs. 7.25 crore ($880,000) and confiscated jewelry valued at Rs. 35 lakh ($42,000). The investigation is still in progress, and the ED continues to uncover the extent of the fraud network.

India’s Enforcement Directorate has made significant strides in dismantling a cryptocurrency fraud ring that targeted a foreign national. By seizing assets and freezing funds, the ED aims to bring the perpetrators to justice and prevent further fraudulent activities. The ongoing investigation will likely reveal more about the extensive network of fake entities and accounts used in this sophisticated scam.

Rise of Cryptocurrency Fraud in South Asia

Cryptocurrency fraud is not limited to India alone; it is a growing concern across South Asia. The region has seen a significant rise in such fraudulent activities due to the increasing popularity and adoption of digital currencies. Scammers exploit the relatively low levels of cryptocurrency literacy and regulatory oversight in these countries. They employ sophisticated techniques, such as phishing attacks, Ponzi schemes, and unauthorized remote access, to deceive unsuspecting victims. The cross-border nature of cryptocurrency transactions makes it challenging for authorities to track and recover stolen assets. This surge in fraud cases highlights the urgent need for stronger regulatory frameworks and public awareness campaigns to protect investors and curb illicit activities in the cryptocurrency market.

Indian Authority Busts Cryptocurrency Fraud Ring Targeting Foreign Nationalhttps://t.co/D2FaPtR9g8
— John Morgan (@johnmorganFL) June 9, 2024

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