India's Enforcement Directorate (ED) collaborated with major cryptocurrency exchanges like Binance, ZebPay, and WazirX to seize Rs 90 crore ($10.5 million) from an online scam app known as E-Nuggets.
As reported by The Hindu, E-Nugget, an online gaming app, stashed $10 million worth of cryptocurrencies in 70 different crypto wallet accounts scattered across three cryptocurrency exchanges.
Upon intervention by the Ministry of Education, these exchanges were contacted to block wallet addresses and transfer the crypto assets to the institution's wallets. The app, masquerading as a gaming platform, allegedly enticed customers with promises of hefty returns on investments, offering various real-money games designed to lure users into placing bets with high commissions.
However, once the investments were made, the app vanished, leaving investors without recourse to recover their funds. Consequently, the Enforcement Directorate has seized properties totaling more than 1.63 billion rupees ($19.5 million), including cash, cryptocurrencies, account balances, and office space.
The scam first surfaced in 2022 when a portion of the company's funds was invested in digital assets. Subsequent investigations by the ED revealed the existence of 2,500 virtual bank accounts containing cash worth Rs 19 crore ($2.2 million).
The alleged mastermind behind the scheme, Aamir Khan, along with his associate Romen Agarwal, has been apprehended and is presently in custody. Since the funds were transferred via digital assets, law enforcement agencies were able to trace, freeze, and seize them.
Despite critics often highlighting the potential for cryptocurrency to be used in money laundering, the transparent nature of blockchain technology renders it challenging to launder funds once detected. Many cryptocurrency exchanges have demonstrated the ability to track and freeze funds associated with criminal activities.
A notable example showcasing the difficulty of laundering money through digital assets dates back to the 2016 Bitfinex hack, where hackers stole 119,756 Bitcoins from cryptocurrency exchanges. However, the perpetrators were eventually apprehended and arrested in 2022 while attempting to launder the stolen funds.
