ED Seizes Record ₹1,646 Crore in Cryptocurrency Amid Money Laundering Probe

In a major development in its ongoing investigation into a fraudulent investment scheme, the Enforcement Directorate (ED) has seized cryptocurrency worth a staggering ₹1,646 crore. This marks the largest seizure of virtual digital assets by the agency, as part of a ‘mega’ money laundering case linked to a scheme promising high returns through investments in securities.

Details of the Investigation

The federal probe agency’s Ahmedabad office conducted a series of searches over the weekend, leading to the confiscation of cash amounting to ₹13.50 lakh, a luxury SUV, and several digital devices. The operation is part of the ED’s investigation into the ‘BitConnect lending program,’ which has been described as a fraudulent and unregistered offer for investment.

The inquiry stems from a First Information Report (FIR) filed by the Surat Police crime branch and targets fraudulent activities that reportedly took place between November 2016 and January 2018, a period marked by the government’s demonetization initiative.

Complexity of the Scheme

Investigators have employed a team of technical experts to dissect what they describe as a ‘complex web’ of transactions conducted through multiple cryptocurrency wallets. The agency discovered that many of these transactions occurred on the ‘dark web,’ an area of the internet often used for illicit activities, which contributed to the obscuring of the transaction trails.

Sources indicate that the ED tracked numerous web wallets and gathered crucial ground intelligence to identify the wallets and locations where digital devices containing the seized cryptocurrencies were held.

Allegations Against BitConnect

The ED’s findings reveal that BitConnect, an unincorporated organization, established a widespread network of promoters who were incentivized through commissions for their efforts in soliciting investments.

In order to attract investments, BitConnect falsely marketed a proprietary ‘volatility software trading bot’ purported to generate returns as high as 40 percent per month using investor funds. The promoters reportedly posted ‘fictitious’ returns on the BitConnect platform, claiming an average of 1 percent per day, which would equate to an astonishing annualized return of approximately 3,700 percent.

However, the ED asserts that these claims were fabrications. The promoters knowingly failed to utilize investor funds for legitimate trading via the claimed Trading Bot. Instead, they allegedly diverted these funds for personal gain, transferring them to digital wallet addresses under their control.

Previous Seizures and International Connections

Prior to this latest seizure, the ED had already attached assets worth ₹489 crore in connection with this case. It has come to light that foreign nationals were also involved in the BitConnect scheme, and the main suspect is currently under investigation by federal authorities in the United States.

The ED has emphasized that its investigation is ongoing, underscoring the complexity and scale of this fraudulent investment operation that has affected many unsuspecting depositors.

As the agency continues to unravel the intricacies of this case, it seeks to hold accountable those who orchestrated this elaborate scheme and duped investors under the guise of high-return investments.