India Conducts 21 Raids Across Three States in Crypto Fraud

• India’s ED raided 21 premises across Karnataka, Maharashtra, and Delhi on December 18.
• Investigation targets 4th Bloc Consultants for fake crypto platform operations.
• Network has been operating since 2015 using an MLM structure with referral bonus incentives.

India’s Enforcement Directorate (ED) executed search operations at 21 premises across Karnataka, Maharashtra, and Delhi on December 18, targeting a cryptocurrency investment fraud network. The raids occurred under the Prevention of Money-Laundering Act, 2002, provisions in a case registered against 4th Bloc Consultants and associated individuals.

The agency searched the residential and office premises of the accused persons and their associates. The action followed a preliminary investigation based on an FIR and information shared by the Karnataka State Police alleging organized financial fraud through cryptocurrency-based investment platforms.

Accused of Targeting Domestic and International Investors

The accused allegedly targeted Indian citizens alongside foreign nationals, collecting funds under the pretense of high-return cryptocurrency investments. During searches, ED uncovered detailed operational methods employed by the network.

The accused constructed fake cryptocurrency investment platforms designed to replicate legitimate websites while advertising excessive returns. These platforms targeted investors in India and internationally by promising rapid profits. The operators misused photographs of established crypto experts and public figures without authorization.

The network paid limited returns to early participants to establish credibility and attract additional investors, following a multi-level marketing structure. Accused persons offered referral bonuses and extensively utilized social media platforms, including Facebook, Instagram, WhatsApp, and Telegram, for promotional campaigns.

Network Established Numerous Ways to Collect Funds

The network allegedly established multiple crypto wallets, foreign bank accounts, and shell companies to collect illicit proceeds. Funds were routed to India through hawala channels, accommodation entries, and peer-to-peer cryptocurrency transfers.

Proceeds funded asset creation in India and overseas locations. ED stated the accused has used this operational model since 2015. Illicit proceeds generated in cryptocurrency form were either used directly in crypto transactions or converted into cash and bank deposits through P2P transfers across various crypto platforms.

The proceeds funded the acquisition of movable and immovable properties both domestically and internationally. Several of these properties were identified during search operations. Investigators also located crypto wallet addresses allegedly controlled by the accused persons for receiving and laundering criminal proceeds.

Investigation revealed that most accused maintained undisclosed foreign bank accounts and foreign entities to facilitate money laundering activities. The coordinated raids are a part of an ongoing investigation into the fraud network’s operations spanning nearly a decade across multiple jurisdictions.

Related: Brooklyn Man Indicted in $16M Coinbase Phishing Scheme Targeting 100 Users