Indian Authorities Bust Multi-State Crypto Scam Running for 10 Years

India’s Enforcement Directorate (ED) has carried out coordinated raids at 21 locations across Karnataka, Maharashtra, and Delhi as part of a widening probe into a large-scale crypto scam that allegedly operated for nearly a decade.

The searches were conducted on December 18 under the Prevention of Money Laundering Act (PMLA). It targeted residential and office premises linked to 4th Bloc Consultants and its associates. 

India’s Largest Crypto Bust Yet?

Authorities say the group ran fake crypto investment platforms that duped both Indian and foreign investors by promising unusually high returns.

According to the ED, the case originated from a police FIR and intelligence inputs from the Karnataka State Police. 

Investigators allege the accused created professional-looking websites that closely mimicked legitimate global crypto trading platforms, complete with dashboards, account balances, and transaction histories.

However, these platforms were largely a façade. Officials say there was little or no real trading activity. 

Instead, the crypto scammers recycled investors’ funds in a structure resembling a classic Ponzi or multi-level marketing scheme.

To build credibility, the operators allegedly misused photographs of well-known crypto commentators and public figures without consent. 

Early investors were paid small returns to gain trust. Later, they were encouraged to invest larger sums and recruit new participants through referral bonuses.

As the scheme expanded, promoters relied heavily on social media platforms. This included Facebook, Instagram, WhatsApp, and Telegram to attract victims. 

The ED believes the network targeted investors in India and overseas.

Investigators say the proceeds of crime were laundered through a complex web of crypto wallets, undisclosed foreign bank accounts, shell companies, and hawala channels. 

Scammers also moved the funds via peer-to-peer crypto transfers before being converted into cash or parked in bank accounts.

During the raids, the ED identified several crypto wallet addresses allegedly controlled by the accused, along with movable and immovable assets acquired in India and abroad using illicit funds.

Authorities also flagged multiple foreign entities used to conceal the money trail.

Notably, officials believe the operation dates back to at least 2015. The scammers evolved over time to evade detection as scrutiny of crypto markets increased.

The investigation remains ongoing.