The Enforcement Directorate (ED), an Indian law enforcement agency, has successfully seized 90 crores ($10.5 million) from the online scam app called E-Nuggets with the assistance of popular cryptocurrency exchanges like Binance, ZebPay, and WazirX.
According to a report by the Hindu, the E-Nugget gaming app had cryptocurrencies worth $10 million stored in 70 different crypto wallet accounts across these three exchanges. The ED reached out to these exchanges and requested them to block the wallet addresses and transfer the crypto assets to the agency’s wallet.
The ED’s report alleges that the E-Nugget app masqueraded as a gaming platform while offering customers attractive investment returns. The app featured various real-money games that enticed users with high commissions and encouraged them to place bets. However, as soon as users invested their money, the app disappeared, leaving investors unable to recover their funds.
As part of their investigation, the ED has seized properties valued at over 163 crores ($19.5 million), including cash, cryptocurrency, account balances, and office space. In 2022, the scam app first caught the attention of law enforcement when some of the company’s funds were invested in digital assets. The ED’s investigation uncovered 2,500 dummy bank accounts and 19 crores ($2.2 million) in cash.
The alleged mastermind behind the scheme, Aamir Khan, was arrested along with his accomplice Romen Agarwal and is currently in custody. The use of digital assets for money transfers allowed the law enforcement agencies to trace and freeze the funds.
Critics often point to the potential use of cryptocurrency for money laundering, but the transparent nature of blockchain technology makes it challenging to launder funds once they are identified. Crypto exchanges have demonstrated their ability to trace and freeze funds associated with criminal activities in various instances.
One notable example is the 2016 Bitfinex hack, where hackers stole 119,756 Bitcoin (BTC) from the exchange. However, the perpetrators were eventually apprehended in 2022 while attempting to launder the funds.
Cointelegraph reached out to Binance and ZebPay for comments on the matter but did not receive a response at the time of publication.
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